economics

March 15, 2010

Sony TV Business to Go on the Attack Electronics Firm Plans to Boost Its Shipments 70%, Push 3-D Models Aggressively in New Fiscal Year

Filed under: Uncategorized — ktetaichinh @ 11:00 pm
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TOKYO—Sony Corp. said its television business will shift to attack mode in the coming fiscal year as it ramps up TV shipments by about 70% to more than 25 million units and aggressively pushes its 3-D models, even though their launch will trail rivals in an increasingly crowded market.

Associated PressSony’s 3-D television

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The Japanese electronics conglomerate said it aims for about 10% of its TV sales in the fiscal year ending March 31, 2011, to be 3-D models. Sony’s 3-D television will be launched in Japan in June, roughly three months after competing offerings from its three biggest competitors, Samsung Electronics Co., LG Electronics Inc. and Panasonic Corp.

While Sony has been focused on restructuring its electronics business by working to lower overhead costs, the company sees 3-D technology as a future driver of growth that will unite nearly every part of the sprawling company.

The new 3-D televisions are critical to Sony’s television business, which has been the company’s Achilles’ heel. The TV operations are expected to lose money for the sixth year in a row in the fiscal year ending March 31, but Sony hopes 3-D interest will stimulate new demand because the technology requires the advanced hardware found in its margin-rich, premium models.

Sony, Panasonic and Samsung have recently announced new TV models that feature 3-D. But the rush to manufacture products hides the fact that there is little content to showcase, the Digits panel reports.

To turn the operations around, Chief Executive Howard Stringer brought in Yoshihisa Ishida, a no-nonsense cost-cutter who ran Sony’s Vaio personal-computer business. Mr. Ishida has worked with the rest of Sony’s new management team to revamp its bloated supply chain and increase outsourcing production of inexpensive TV models.

Mr. Ishida said the goal for the fiscal year ending this month was to lay the groundwork for a return to profitability, and he acknowledged the effort came at the cost of a drop in market share to Samsung and LG.

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The next fiscal year is really “a year when we think we can attack,” Mr. Ishida said at a news conference. When asked if the television business could meet aggressive sales targets while still reaching the profitability goal, Mr. Ishida replied: “I believe so.”

Global television makers are starting to roll out 3-D models this year to capitalize on excitement about 3-D movies in theaters and the coming release of 3-D video games. While 3-D televisions have existed in the past, the new models from Sony and its rivals use battery-powered glasses to create the illusion of high-definition 3-D. In the past, the TVs used color-filtered glasses, resulting in images with somewhat lower picture quality.

Samsung started selling its models at the end of February, and LG expects to launch new 3-D models this month. Panasonic’s first 3-D model will go on sale Wednesday in the U.S., where it plans to discount 3-D sets by about 50%. It plans to sell a 50-inch plasma display model in Japan for about 430,000 yen, or about $4,760.

South Korea’s LG Electronics said Tuesday that it will team up with Indian media and entertainment company Valuable Group to introduce its three-dimensional flat-screen televisions in India.

Bloomberg NewsSony CEO Howard Stringer wears 3-D glasses while speaking at an electronics show in Las Vegas, in January.

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The first Sony 3-D models will be available in Japan June 10, with a 46-inch model selling for 350,000 yen. The company said it hasn’t set launch dates or pricing for 3-D models in other markets, including North America.

Mr. Ishida said he doesn’t think the later launch date will be a major disadvantage for Sony because 3-D content won’t start becoming widely available until later this year.

One major component of Sony’s 3-D strategy is a software update for its PlayStation 3 game console to make it capable of playing 3-D video games and movies. Video games are expected to be among the most popular content available in 3-D because they will be easy to convert from the current 2-D format.

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