Flat-screen TV makers retune sales tactics
By YASUHIRO TAKIZAWA AND AYUHIKO SASAKI, The Yomiuri Shimbun
Major Japanese flat-screen TV makers are seeing brisk sales at home and abroad as each company pursues different strategies to grab a piece of the growing market.
Sony Corp., which has until now focused on high-end models, aims to expand its share of the low-end market, while Sharp Corp. has revised upward its sales plan for fiscal 2008 and is on course to open a new factory in Osaka by 2010.
This intensification in competition is due to an expected doubling in the in flat-screen TV market within five years, although there are some doubts if the demand can be maintained amid a global economic slowdown.
In the flat-screen TV market in the United States, where competition among manufacturers is severe, industry observers have been watching a drastic decline in market share of emerging TV maker Vizio Inc. The California-based company sells low-priced TVs by cutting cost through outsourcing production.
Samsung 32"
A 32-inch Vizio TV set is priced at about $600. However, the company's share of the North American market from April to June was 7.3 percent, ranking it fourth. In the January-March period, it was ranked third, with a 10.6 percent share.
The major reason for Vizio's recent decline is due to more entries into the low-cost market by Sony and Samsung Electronics Co.
Sony started to sell low-priced TVs - about $700 for a 32-inch model, for example - at major electronics stores in spring, as the company shifted from its previous strategy of marketing high-end TVs in the $1,000 price range. With a strategy of putting priority on sales volume, Sony's market share for the first half of the year in the North America was 17.3 percent, up from 16.2 percent from 2007. The strategy appears to be bearing fruit.
Sony's strategy is to increase its overall profit through increased sales of low-end flat-panel TVs, compensating for the relatively low profit margins per TV set with sales volume. The company remains confident about the remainder of the business year, aiming to sell 17 million sets, a 60 percent increase from the previous year.
Sharp also plans to boost this year's estimated sales of liquid crystal TVs from 10 million units to 11 million units. Sharp President Mikio Katayama said, "I'm sure TV sales will increase in the second half of the year."
Sharp 26"
Matsushita Electric Industrial Co. also is optimistic over its sales plans for this fiscal year - 6 million units for plasma TVs and 5 million units for LCD TVs - a 1.5-fold increase from the previous year.
Although all three companies are positive about their sales plans, each has a different profit strategy.
While Matsushita and Sharp's TV business are in the black, Sony's had an operating deficit of 73 billion yen in the business year ending March 2008.
Meanwhile, Hitachi Ltd., which has had sluggish TV sales as of late, has gone in the opposite direction by focusing more on high-end products and narrowing its sales volume. The company's consumer electronic appliances division, which includes TVs, had a deficit of 109.9 billion yen in the business year ended March 2008, the majority of which was due to its TV division.
Hitachi plans to produce 1.2 million plasma TV panels this year. The company's vice president Kunihiko Onuma, said; "Of the 1.2 million, we are planning to use 800,000 to 900,000 for our products and the rest of the panels will be sold to Chinese TV makers."
Whether its strategy of not pursuing increased market share will work depends on how well Hitachi can promote its panel sales.
Panasonic 37"
Hitachi 50"
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