Nearly a year after its spin-off from electronics maker Three-Five Systems Inc, Brillian Corp has signed Sears, Roebuck & Co as the first customer for high-definition televisions it hopes will boost sales, its chief executive said on Friday.
The Tempe, Arizona, company, which reported a loss of nearly $20 million last year, forecasts sales of 2,000 TVs a month by the middle of next year thanks to the Sears deal, chief executive Vincent Sollitto told Reuters.
At that level, Brillian could pull in $100 million in sales and $1.50 to $1.75 a share in profit per year, Sollitto said.
That type of growth would mark a major turnaround for Brillian, which burned through millions of dollars in cash in recent years while seeking a market for its advanced display chips - Liquid Crystal on Silicon, or LCoS - at the core of its new $8,000, 65-inch high-definition TVs.
Intel Corp, the world's largest chip maker, plans to supply LCoS panels of its own for rear-projection TVs. But the technology has had some major failures in the past, and Brillian could not find support from the TV industry to buy its LCoS panels, Sollitto said.
So Brillian set off on its own to find supplier partners for the light engines, plastics and other parts necessary to make a complete, high-end television set.
While costly, the strategy appears to have paid off in the deal with Sears, which will start selling the sets under its Veos brand next month. Brillian still cannot produce high volume numbers of sets and depends on suppliers to survive.
"We've got a long hill to climb in terms of production," he said. "It's scary, because I've never been in a situation where so much of our future is in the hands of our suppliers."
While Brillian plans to announce another new customer as soon as next month, the company faces fierce competition from a variety of competing display technologies, including plasma, LCD, and sets based on a Digital Light Processing technology made by Texas Instruments Inc.
Also, the company could lose its technological head start when Intel introduces its own LCoS chips. As a high-end niche player, Brillian must invest in research and development to stay technologically ahead of LCoS rivals, Sollitto said, and it can only do that if it can generate cash.
Intel this week postponed the launch of a video display chip it had previously planned to introduce by year end.
Sollitto said his small company is intentionally making more expensive, high-end products because it cannot manufacture sets at a rate needed to supply a mass market.
"We're constraining volume by price right now, intentionally," he said.
Brillian's shares have held up through a technology stock slump this year, rising to $8.64 on Friday from an $8 level in September, when it was spun off by Three-Five.
Chris Chinnock, president of microdisplay newsletter publisher Insight Media, said he is "quite impressed" with the quality of Brillian's displays, but added its inability to produce at high volumes could limit just how big it can grow.
Comments
Comments are closed.