Bloomberg News

Sony, Samsung Ask U.S. Retailers to Curb Discounts on TV Sets

May 23, 2012

Sony Corp. (6758) and Samsung Electronics Co. (005930) asked U.S. retailers to maintain minimum prices for TVs to boost profitability as global demand declines.

Sony’s policy, effective last month, covers about 120 models of TVs, camcorders, audio players and tablet computers, though excludes Vaio computers, Keizo Masuda, a spokesman for the company, said by phone today. Samsung’s program, in place since early this year, will cover some new TV models, said Nam Ki Yung, a Seoul-based spokesman for the company.

The move comes after TV shipments last year declined for the first time since 2004, leading to a drop in prices and record losses at Japanese manufacturers. Sony, the world’s third-biggest TV maker, has forecast a ninth consecutive annual loss from selling TVs while industry leader Samsung is bringing out new models and technology to charge consumers more.

Earlier this month, Tokyo-based Sony predicted its TV sales will decline 11 percent to 17.5 million units and will lead to an 80 billion-yen ($1 billion) loss in the year ending in March.

The maker of Bravia TVs fell 2.1 percent to 1,096 yen in Tokyo today, the lowest level since August 1980. The shares have declined 21 percent this year, compared with a 15 percent increase for Samsung shares in Seoul trading.

Samsung’s Profit

Sony’s current policy, similar to one introduced in 2008 for digital cameras, is intended to boost retailer support for its brand, Masuda said. The proposals don’t violate U.S. law, he said.

The Wall Street Journal first reported the companies’ moves earlier today.

LG Electronics Inc., the world’s second-largest TV maker, isn’t setting prices and doesn’t plan to do so, Ken Hong, a Seoul-based spokesman for the company, said in an e-mail today.

Noncompliance with Suwon, South Korea-based Samsung’s guidance will cause “certain consequences,” the company said in a statement without elaborating. Other manufacturers have adopted similar policies in industries including consumer electronics and apparel, Samsung said in the statement.

Samsung didn’t collude with other companies in setting the policy, Nam said.

First-quarter operating profit at Samsung’s consumer- electronics unit, which includes TVs, was 530 billion won ($452 million), compared with a profit of 8 billion won a year earlier, Samsung said in April.

Last year, global TV shipments fell for the first time since 2004, according to DisplaySearch, part of NPD Group. Flat- screen TV shipments in the U.S. may fall for the first time this year, to 37.1 million units from 39.1 million the year before, according to IHS Inc.’s iSuppli.

To contact the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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