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Do IT this week: Layering
Competition fierce for flat-screen market. Sales strategies differ
By Yasuhiro Takizawa
and Ayuhiko Sasaki
Yomiuri Shimbun
Published on Monday, Sep 08, 2008
TOKYO:
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 increased its sales plan for fiscal 2008 and is on course to open a factory in Japan by 2010.
This intensification in competition is attributed to an expected doubling in the 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 costs through outsourcing production.
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 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 — at major electronics stores in the 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.
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 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 to 11 million units. Sharp President Mikio Katayama said, ''I'm sure TV sales will increase in the second half of the year.''
Matsushita 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.
While Matsushita and Sharp's TV businesses are profitable, Sony's had an operating deficit in the business year ending March 2008.
Meanwhile, Hitachi Ltd., which has had sluggish TV sales, has focused on high-end products.
TOKYO:
Get the full article here.
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