Bloomberg News

Sony Says 2012 a Tough Year for TVs, Sees Demand for Larger Sets

September 27, 2012

Sony Senior Vice President Masashi Imamura

Masashi Imamura, a senior vice president in charge of home entertainment products. Photographer: Tomohiro Ohsumi/Bloomberg

Sony Corp. (6758) expects a tough year for its television-making unit this fiscal year because of a slowing economy, the head of the business said.

“Year-end demand isn’t looking good globally,” Masashi Imamura, a senior vice president in charge of home entertainment products, told reporters in Tokyo today. Sales of larger models may help the TV-manufacturing industry, which “will probably struggle” to match last year’s sales, he said, while sticking to the company’s annual sales target.

Sony said in August its main TV operation may lose about 80 billion yen ($1 billion) in the year ending March 2013, a ninth straight year of losses from the business, adding to about 700 billion yen in losses since April 2004. Chief Executive Officer Kazuo Hirai is reducing the number of Bravia models as he aims to make the TV unit profitable in the year ending March 2014.

The electronics maker, seeking to recover from four straight years of net losses, cut its annual TV sales target last month to 15.5 million units from 17.5 million units, citing a slowing global economy.

Toshiba Corp. (6502), the maker of Regza TVs, may miss its goal of selling 16 million TVs this fiscal year by as much as 20 percent, Masahiko Fukakushi, chief executive officer of the company’s digital products unit, told reporters separately today in Tokyo.

Trailing Samsung, LG

Global TV shipments fell 8 percent to 51.6 million units in the quarter ended June 30 from a year earlier, a second consecutive quarterly decline, DisplaySearch said Sept. 11, citing worsening economic conditions. Japan was the hardest hit, plunging 77 percent, while developed markets overall recorded a 23 percent decline, the researcher said.

Sony ranked third, trailing Samsung and LG, with an 8.3 percent market share in the quarter, compared with 9.4 percent in the preceding quarter.

Sony is carefully monitoring sales in China as some discount outlets have halted promotions of Japan-made goods, Imamura said. A dispute over islands in the East China Sea that are claimed by both countries has sparked protests in China, disrupting local output by Japanese companies and reducing demand for their products in the world’s second-largest economy.

Sony’s TV-unit reform plan “is progressing as planned,” Imamura said. There will probably be a significant improvement in the fiscal year starting April 2013, he said.

Sharp Venture

The company sold its stake in a liquid-crystal-display venture with Sharp Corp. in June after the Osaka-based company turned to Taiwan’s Foxconn Technology Group for a capital alliance, which included a sale of a stake in the venture.

Sony ended a similar panel venture with Samsung Electronics Co. last year as part of its plan to trim losses at the TV unit. Hirai has said the sale of the stake in the venture to the South Korean company will save about 50 billion yen.

In June, Sony agreed with Panasonic Corp. to jointly develop TV sets that use organic light-emitting diode panels, or OLED screens. The partnership is the first between the main TV operations at the two companies. South Korea’s Samsung Electronics Co. and LG Electronics Inc. (066570) have said they’ll introduce OLED models by Dec. 31.

The collaboration with Panasonic is running smoothly and the two company may offer OLED products after March 2014, Imamura said.

Sony said today it will start offering 84-inch sets using so-called 4K technology for 1.68 million yen in Japan from Nov. 23. The company sees growing demand for larger sets in developed markets such as North America and Japan, Imamura said. The 4K standard enables higher-resolution images than conventional models.

Toshiba will display an 84-inch 4K-resolution set at the CEATEC electronics show near Tokyo next week, it said in a statement today.

To contact the reporter on this story: 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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