Sony may beat Sam­sung in In­dia LCD TV Sales, Dis­playSearch says

The Pak Banker - - Company & Boss News -

TOKYO: Sony Corp., strug­gling to re­turn its tele­vi­sion busi­ness to profit, may pass Sam­sung Elec­tron­ics Co. this year as the top seller of flat-screen TVs in In­dia, the fastest­grow­ing ma­jor mar­ket, re­searcher Dis­playSearch said.

In a shift from an ear­lier strat­egy that fo­cused on In­dia's wealth­i­est shop­pers, Sony has gained mar­ket share by of­fer­ing cheaper mod­els and ex­pand­ing its dis­tri­bu­tion net­work, Hisakazu Torii, a Tokyo-based an­a­lyst at Dis­playSearch, said in an in­ter­view yes­ter­day. The maker of Bravia TVs last year ranked third in In­dia be­hind Sam­sung and LG Elec­tron­ics Inc., he said.

"We're fi­nally start­ing to see the fruits of Sony's ef­forts to strengthen its brand im­age and its sales net­work," Torii said. "There's a real pos­si­bil­ity they could take the top share for the year."

Sony's push in In­dia is part of a larger move by Ja­panese com­pa­nies in­clud­ing Toshiba Corp., who are fol­low­ing South Korean ri­vals in ex­pand­ing into emerg­ing mar­kets. Still, a weak con­sumer re­cov­ery in the U.S. and Europe, Sony's tra­di­tional strongholds, may pre­vent Chief Ex­ec­u­tive Of­fi­cer Howard Stringer from end­ing a six-year los­ing streak at the TV busi­ness.

Ja­pan's largest ex­porter of con­sumer elec­tron­ics ac­counted for 23 per­cent of all flat-panel TVs sold in In­dia dur­ing the first nine months of this year while Sam­sung and LG lagged be­hind at about 22 per­cent, Dis­playSearch's Torii said. Last year, Sam­sung led with 29.3 per­cent, fol­lowed by LG's 23.1 per­cent and Sony's 22.9 per­cent.

"The bot­tom line is: they might be late to the party, but Sony fi­nally un­der­stands where they want to com­pete," said Atul Goyal, a se­nior an­a­lyst at CLSA Asia-Pa­cific Mar­kets in Singapore. "It was all Sam­sung and LG for the last 10 years, so for Sony to come up the way they have is im­pres­sive."

Sam­sung won't im­ple­ment "low-price strate­gies" in emerg­ing mar­kets, James Chung, a com­pany spokesman, said in an in­ter­view. "Pre­vi­ously, we fo­cused on the U.S. and Euro­pean mar­kets, but emerg­ing mar­kets such as In­dia and South Amer­ica are be­com­ing more and more im­por­tant."

Sony's shares have risen 13 per­cent this year, while the bench­mark Nikkei 225 Stock Av­er­age has slipped 1.7 per­cent. The Toky­obased man­u­fac­turer of TVs, video game con­soles and note­book com­put­ers rose 2.7 per­cent to 3,010 yen as of the 3 p.m. close on the Tokyo Stock Ex­change.

In­dia and other emerg­ing mar­kets are the rea­son Sony has been able to keep its tar­get of sell­ing 25 mil­lion TVs this year, or 60 per­cent more than last fis­cal year, Vice Pres­i­dent Hiroshi Yosh­ioka said yes­ter­day. The fi­nal tally may fall short by "a lit­tle bit," he said.

Sell­ing more sets by it­self isn't enough to make the busi­ness profitable. Fall­ing prices amid "harsh com­pe­ti­tion" this hol­i­day sea­son may mean that Sony's TV op­er­a­tions lose money for a sev­enth con­sec­u­tive year, Chief Fi­nan­cial Of­fi­cer Masaru Kato said in Oc­to­ber.

While flat-panel mod­els only made up 22 per­cent of the es­ti­mated 15.3 mil­lion TVs sold in In­dia this year, the num­ber of such sets is likely to dou­ble next year as In­dian con­sumers re­place their bulkier glass-tube mod­els, ac­cord­ing to Austin, Texas-based Dis­playSearch. In­dia is likely to be­come the world's third-largest TV mar­ket next year, ac­cord­ing to the re­searcher.

Ear­lier this month, In­dia's fi­nance min­istry raised its eco­nomic growth fore­cast for the cur­rent year to 9.1 per­cent, cit­ing higher con­sumer de­mand in ru­ral ar­eas. At $1.3 tril­lion, In­dia is the world's sec­ond-fastest grow­ing ma­jor econ­omy.

Other Ja­panese man­u­fac­tur­ers are also try­ing to make in­roads in de­vel­op­ing mar­kets. Toshiba this month is in­tro­duc­ing its own line of lower-priced mod­els to dou­ble TV sales in South­east Asia. The Tokyo-based com­pany said last month it's count­ing on growth in Asia next year to help off­set an an­tic­i­pated plunge in the do­mes­tic mar­ket af­ter the ex­pi­ra­tion of govern­ment sub­si­dies de­signed to boost con­sumer spend­ing.

When Sony started sell­ing flat-panel TVs in In­dia in 2005, it tar­geted wealth­ier con­sumers who could af­ford a 40-inch Bravia that cost more than 200,000 yen ($2,400), said Yuki Shima, a Tokyo-based spokes­woman at Sony. The com­pany fo­cused on cus­tomers with an­nual salaries greater than $10,000 and is now reach­ing out to con­sumers who make as lit­tle as $4,000 a year while ex­pand­ing into more cities, Shima said.

This year, Sony ex­panded its lineup to in­clude smaller mod­els such as 22-inch sets priced at about 34,000 yen. Re­plac­ing LED back­lights with flu­o­res­cent bulbs in some sets helped Sony lower prices and also costs, Shima said. The com­pany aims to dou­ble TV sales in In­dia, she said, de­clin­ing to com­ment on mar­ket share. -Bloomberg

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