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Tuesday, August 30, 2011

Japan Companies try to hold on in small LCD

Joint venture - see news below.

JZ

Toshiba, Hitachi, Sony to set up LCD firm

Toshiba Corp., Hitachi, Ltd. and Sony Corp. have basically agreed to jointly establish a company to manufacture small and midsize liquid crystal display (LCD) panels by year-end in a bid to compete with South Korean and Taiwan rivals, it has been learned.
According to industry sources, the envisaged company, intended to integrate the three companies' businesses in the field, will be partly financed by the Innovation Network Corporation of Japan, a private-public investment fund established in 2009 to support next-generation businesses.
The agreement will be officially announced as early as Wednesday.
The new company's global market share is expected to be the world's largest, as the three companies' combined share in the field in 2010 was 21.5 percent, exceeding Sharp Corp.'s leading 14.8 percent share.
About 70 percent of the new company's capital will be financed by the investment fund. The remaining capital will be equally shared by the three companies.
The demand for small and midsize LCD panels has risen sharply due primarily to international growth in smartphone use, making the LCD business highly competitive.
Although Japan currently leads the LCD market, South Korean and Taiwan rivals, which have invested heavily in the industry, are catching up.
The joint project is being led by the investment fund, which aims to strengthen Japan's competitiveness and keep Japan's leading status in the field.
According to industry observers, the consolidation stems from the trio's decision that individually they cannot win the competition. The project's success is crucial for Japan's shrinking LCD business.
According to DisplaySearch, a U.S. research company, the global market for small and midsize LCDs in 2011 will be $25.1 billion (about 1.9 trillion yen), 20 percent higher than 2010.
Industry sources said currently Japanese companies have an advantage in LCD technology for touch screen devices.
However, Samsung Electronics Co. of South Korea leads in organic electroluminescence (EL) panels, which are said to provide higher-definition images.
Advanced technology and investment capital will be indispensible for competing in the LCD market. However, after Hitachi suffered a 2.5 billion yen loss in fiscal 2010 and Toshiba went into the red from 2007 to 2009 in the small and midsize LCD business, neither company can afford to invest much in their LCD business individually.
There is a fear that without this venture, the Japanese small and midsize LCD display industry may face a similar defeat to that of large LCD TV panels, which were technologically superior to those of foreign competitors, but lost in competition for investment.
(Aug. 31, 2011)

Samsung to cut LCD output sharply!

Worldwide industry numbers continue to cause problems for everyone in the industry - even Samsung!

JZ

Samsung Elec to cut TV LCD output sharply -report



SEOUL | Tue Aug 30, 2011 3:06pm IST

SEOUL Aug 30 (Reuters) - Samsung Electronics Co plans to reduce its monthly television panel output by fourth-fifths by the end of this year and convert some of the lines to produce displays used in tablets and notebook, a media report said on Tuesday.

The move comes as global flat-screen makers are struggling with depressed consumer demand for televisions and computers amid mounting uncertainty over global economic prospects.

The Korea Economic Daily said in an unsourced report that Samsung plans to reduce its monthly TV panel production from between 1 million and 1.3 million units to around 200,000-300,000 units by the end of this year.

Samsung also plans to shift some of its TV panel production lines to make tablets and notebook panels, the report said.

Samsung said on Tuesday it would not comment on market rumours.

The South Korean firm, which vies for the top title worldwide with LG Display in the large-sized liquid crystal display (LCD) flat-screen market, has said it would keep production flexible according to the market outlook.

LG Display also said on Monday that it would slash next year's capital spending by a quarter as booming sales of mobile devices from iPads to Android smartphones saps demand for TV panels, its main source of earnings.

The LCD business is the most underperforming unit among Samsung's core operations, which also includes memory chips, handsets and televisions. The flat-screen division reported a second consecutive quarterly loss in the second quarter, and Samsung replaced the division head and combined it into its chip business. (Reporting by Miyoung Kim; Editing by Ken Wills)

Apple TV rumors

See article below from the Huffington Post

JZ


Is Apple working on a smart LCD TV powered by iOS software?
According to a recent report by Venture Beat, "multiple sources in Silicon Valley" say yes.
Apple analyst Gene Munster told VentureBeat that an Apple TV could be ready by late 2012 or early 2013.
Furthermore, writes VentureBeat, "The price of LCD panels has droped fairly steadily, thanks to increased manufacturing efficiency, so eventually quality screens became cheap enough to make the 9.7-inch iPad economically feasible." If the trend continues, VentureBeat predicts that "15-inch or 19-inch touchscreen televisions running iOS" will hit shelves in the foreseeable future.
Apple has already released two generations of a set-top box, called Apple TV, which in its current iteration lets users purchase and stream content from iTunes, as well as access streaming services like Netflix, Flickr, YouTube, Vimeo and more. But a TV built on iOS would function more like an iPhone or an iPad, with access to the web, apps and more.
PCMag's John C. Dvorak says that demand may be high for an Apple-branded television set, despite Apple's current set-top offering.
"Every time I mention it to anyone, especially to younger people who seemed to have traded TV for Hulu altogether, they all say the same thing: 'If Apple built a TV, I'd buy it,'" writes Dvorak. "With the market the way it is, I think people would go nuts over a branded Apple television."
In June, an unnamed former Apple exec told DailyTech that the company was planning a television set with deep iTunes integration that would "blow Netflix and all those other guys away."
"You'll go into an Apple retail store and be able to walk out with a TV. It's perfect," the source said, according to DailyTech.
But not everyone thinks an Apple TV is on its way.
Gdgt's Ryan Block maintains that rumors about an Apple-made TV set are "highly unsubstantiated."
Writes Block:
TVs are very low frequency purchases, meaning if Apple built intelligence into the sets, their replacement cycles would be far longer than for lower cost consumer electronics (i.e. 5-10+ or more years on a $3,000 TV vs. 1-3 years on a $99 set-top-box). Talk about adding insult to injury: not only do TVs have low margins, people hardly ever buy them.

Blogger Erik Schwartz wrote that he is "quite confident" there will be no Apple-branded TV "in the near future."
"If Apple was raking in the money selling media at high margins it might make sense to ship a TV as a moat for the media business," Schwartz wrote in a post on his Tumblr blog, "but media sales via iTunes is a low margin moat to defend Apple’s high margin hardware business."

Wednesday, August 24, 2011

Vizio - Trouble?!

Vizio pretty loud and proud about their sales number. Now going quiet and not responding to calls as noted at the end of the article. What will Q3 and Q4 bring for the TV industry?


Is The Bloom Off Vizio HDTV?

August 22nd, 2011 · 2 Comments · 3D HDTV, LCD Flat Panel, LED LCD Flat Panels




Vizio fell off its perch as the number one brand of LCD TVs in the second quarter of 2011 according to industry marketing research firm DisplaySearch. The honor now goes to Samsung. In terms of overall TV shipments into the US and Canada, Vizio is now number four, topped again by Samsung (1), Panasonic including new subsidiary Sanyo (2) and LG (3).

Furthermore, reflecting a shift in consumer buying habits, Vizio no longer has an industry top five selling LCD model (by dollar value in Q2), with Samsung now occupying four places and Sharp the fifth, reports Tamaryn Pratt, principal of TV industry marketing data company, Quixel Research.
With a formula that combined low prices, outsourcing panels and parts, and using a Taiwan based assembler to build its TVs Vizio came from nowhere in 2002 to become a major flat panel player in the American market. Vizio kept distribution costs low by selling its brand mainly through warehouse clubs, Wal-Mart and Target.
Lately, the company appears to be struggling. Unlike Sony, Samsung, LG and the other tier one manufacturers, Vizio has yet to introduce the bulk of its 2011 models including any of its passive 3D HDTVs, no doubt due to a glut of leftover 2010s which are still offered for sale in the warehouse clubs and on-line.
DisplaySearch analyst Paul Gagnon told HD Guru the bright spots in Q2 2011 sales were the low end under $500 models, dominated by price leaders and sets selling for over $1000. It appears consumer preferences are shifting to the cheapest sets available in the size/feature class such as RCA and Philips (now made by Funai) or to the established, panel producing high quality set makers i.e. Panasonic, Samsung and LG.
Amazon’s latest top 20 best sellers statistics support this, with Vizio capturing only 4 of the 20 models. Here is the link.
Recent visits to warehouse clubs BJs and Costco revealed a sea of leftover 2010 Vizios competing with new 2011s from Panasonic, Samsung, Sharp and other top vendors. According to industry sources, Vizio’s Chief Sales Officer Randy Waynick is no longer with the company. Waynick was quoted in Feb. 2011 in Dealerscope a CE trade publication saying “Vizio grew last year. Our partners grew last year. We’ve got a winning formula, from the component all the way to the retail floor.”
Dealerscope added: In fact, a Vizio spokesman said that the company will be named #1 in North American LCD sales for the full year (2010) when Displaysearch sales and market share numbers are announced later this week.
After what he termed an incredible year, Waynick expressed disappointment at a recent spate of mainstream news articles about an underlying lack of health in the HDTV business.
“That’s just not our experience,” he said. “We’re not seeing that side of the business at all. Even with our retail partners, we’re not seeing that sort of dismal outlook. The consumers are spending money. We’ve seen such a dramatic spike in the high end of our business.”
Based on the new numbers, fortunes appeared to have substantially changed soon after publication of the February story.
We submitted numerous requests to Vizio media relations regarding the status of its delayed 2011 models, and inquired, along with other questions, as to where the sets will be sold, but Vizio chose not to respond.

Sunday, August 21, 2011

Remember when Japan took over the TV business - maybe over!

Japan ponders pulling the plug on TVs
Tokyo— Financial Times

The television was bright, elegantly designed and -- here was the downside -- damnably tricky to make. But when Sony engineers learnt to finesse the new Trinitron’s three-cathode tube into place, they created a worldwide hit.
It has been more than 40 years since the Trinitron vaulted Sony into the top ranks of consumer electronics companies. Today, as industry watchers know, the picture is dimmer: Samsung and LG of South Korea are the top sellers of tube-free flatscreens, and Sony’s TV division is mired in its eighth year of losses.

Sony is not the only Japanese producer to struggle in the flatscreen era: Hitachi, Toshiba, Sharp are among those to have lost market share.
In the past decade, Japanese technology groups have lost almost a third of their overall market share to Taiwanese and South Korean rivals, according to a survey by CLSA, the independent brokerage and investment group. In televisions the decline has been sharper: Japanese companies make less than 10 per cent of the LCD panels that are the core of modern flatscreen sets, down from half a decade ago and virtually 100 per cent when the technology was first commercialized in the 1990s.
Yet there are signs - finally, many shareholders would say - that at least some Japanese producers are asking a once unthinkable question: should they be making televisions at all? Hitachi executives said this month they were considering outsourcing all their TV production to cheaper contract manufacturers elsewhere in Asia. Other companies are weighing similarly drastic measures, though they are reluctant to say so publicly.
Even Sharp - a relative success story and the leading seller of liquid crystal display (LCD) televisions in the Japanese market - is backing away from TV manufacturing, at least in Japan.
Hisakazu Torii, an analyst at DisplaySearch, says the choice facing Japanese groups has grown starker because of a global slowdown in flatscreen TV sales, particularly in richer markets where the latest and biggest Japanese sets still fetch premium prices. “People are buying smaller TVs for their second or third set, but there are no margins there,” he says.
Even in Japan, where consumers have mostly stayed loyal to homegrown brands, price competition has been fierce amid a persistent glut of panels, a set’s most important component. In the year to May the average price of a 32-inch LCD TV fell from $800 (U.S.) to $610, according to BCN, a market research group.
In the analogue era, when products such as the Trinitron ruled, Japanese companies prospered thanks to an unmatched ability to mass produce high-quality products at relatively low prices. The relentless rise in the value of the yen has eroded the price competitiveness of their factories in Japan, but it is the quality issue that has executives worried for the ultimate future of their TV businesses. Digital products can be churned out more easily and uniformly, making the sort of finicky hands-on work that made the Trinitron a success less valuable.
“You can’t differentiate today,” says Atul Goyal, an analyst at CLSA. “Now the industry is all about moving fast so nobody can catch up, and that’s not in Japanese companies’ DNA.”
Kazuo Hirai, the Sony executive who is the leading candidate to succeed Sir Howard Stringer as chief executive, acknowledges that televisions have become a “commodity business”. Sony now makes only about half of its TVs in-house, having closed or sold several factories as part of a restructuring. It promised further steps last month after it cut its full-year profit forecast by 25 per cent, owning largely to worse than expected TV sales.
Sony recently appointed a new head of its TV division, Masashi Imamura, whose job Mr. Hirai says will be to “fight commoditization” and differentiate its offerings. That will not be easy. Recent innovations such as 3D technology have not proved as popular as the company hoped, and rivals quickly matched its features. Sony’s shares are at less than half the level they were back when the TV business was making money, and pressure to give up manufacturing sets, if not selling them, is mounting.
Sony’s equity would be worth 70 per cent more if losses at its television division were eliminated, according to data compiled by Bloomberg.
Still, letting go of a business with a long history is difficult, not only because of the workers who depend on it.
“Manufacturing is an art, even in this day and age when a lot of stuff is automated,” Mr. Hirai insists, saying Sony will continue to make at least some TVs in-house. “If you manufacture everything outside, then all the expertise that we’ve build in-house of the past 50-60 years doesn’t really manifest itself in the product any more.”

The Truth about LCD TVs - CFL or LED backlight

Bit long - but if you can make it through - good stuff most people are not aware of on ALL LCD TVs.

JZ

Is LCD and LED LCD HDTV uniformity a problem?

By:
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(Credit: Geoffrey Morrison/CNET)
Nearly every LCD TV on the market has a problem: uniformity. Certain areas of the screen are going to be brighter than other areas. On dark scenes, this can be visible and sometimes distracting.
So what causes it? What can be done?
The problem
All LCD TVs are essentially two parts: a backlight, and the Liquid Crystal "glass." The backlight, commonly CCFL or LEDs, creates all the light. As I'll explain below, "LED TVs" are just regular LCD TVs that use LEDs as their backlight. The LC glass is a complex sandwich of electrodes and liquid crystal whose sole job is to block the light created by the backlight.
OK, so technically polarization filters block the light, the liquid crystal just twists the polarization, but for the ease of discussion, let's just say the LC "blocks" the light.
In the simplest of LCD TVs, the backlight creates a set amount of light. In more expensive TVs, the backlight may adjust depending on what is going on with the video. In other words, during a dark scene, the backlight may dim so the image appears darker than what would be possible with just the liquid crystal.
This LC/backlight system is never perfect, either due to manufacturing irregularities, design inefficiencies, or whathaveyou. Because it's not perfect, parts of the screen are going to "leak" light.
The backlight
CCFL backlights are a series of tiny fluorescent lights, like miniature versions of what's found in offices, stores, etc. Below is a look at the layers of a typical CCFL backlight TV. What you're seeing is the entire TV, spread out so that each layer is separate and visible.

The many layers of an LCD TV. The layer on the far left is the clear covering surface. The next layer (where you see the image) is the liquid crystal layer. The next layer (the bright white area in front of the gray plastic), is the diffusion layer. This is actually translucent "white" plastic. The back, far right, of the image is the backlight itself surrounded by the plastic frame of the TV.
(Credit: Geoffrey Morrison/CNET)


The image on the left is the same layers as the previous image, but with the camera stopped down to show the bright areas. Here you can see the translucent diffusion layer in between the liquid crystal and backlight. The right image is the CCFL backlight. For a sense of scale, this was a 40-inch LCD, each CCFL is little more than an 1/8th of an inch in diameter.
(Credit:Geoffrey Morrison/CNET (via Home Theater magazine))

Ideally, the diffusion layer perfectly evens out the light from the individual CCFLs, so that the entire screen is a uniform amount of light. This is pretty tough to do, made harder by the number of CCFLs, the expense spent on the diffusion material, and other design factors.
It's possible then, on dark images, for the areas directly in front of a CCFL tube to be brighter than the areas between the tubes. Smaller LCDs may only have the CCFLs along the edges, making them perform similar to edge-lit LED models. Which brings us to...
AllLED TVs are just LCD TVs
LED backlights, annoyingly and misleadingly referred to as "LED TVs," use tiny, efficient LEDs instead of CCFLs. How these are implemented has a dramatic effect on uniformity. Most LED LCDs today have their LEDs arranged along the edges of the screen (edge-lit). Some of these have their LEDs along just two sides (either top/bottom or on the sides), while others have LEDs on all four sides.
If you've ever put a lit flashlight on a table, you have an idea of the problem created by putting LEDs along the edge of a TV. The area directly in front of the LEDs will be bright, while the area farthest from (in this case, the center of the TV) will be dimmest. In these cases, the LEDs fire across a surface with ridges (or something similar) that gets progressively taller towards the center. This way, the tall central surfaces can reflect the light that would otherwise just bounce back from the opposite side of the television.
I used my extensive artistic talents to draw this diagram:

This wondrous diagram shows a top-down cutaway view of the right half of an edge-lit LED LCD. The LED (yellow here, because white doesn't show up on a white background) fires along the width of the TV. The light guide (circular parts) reflect this light towards the screen. Done perfectly, the center of the screen (where the guide is tallest), is just as bright as the edges.
(Credit: Geoffrey Morrison/CNET)

As cool as this is, it's not perfect.
Uniformity
Each of the above backlighting methods has the potential to have poor brightness uniformity in a unique way. For example, a side edge-lit LED could look like this, with a black screen:

An illustration of a common brightness uniformity issue with edge-lit LCD. Note how the sides of the screen closest to the LEDs "leak" a bit of light, causing the brightness of the screen to not be uniform.
(Credit: Geoffrey Morrison/CNET)

A top/bottom edge-lit LED could look like this:

(Credit: Geoffrey Morrison/CNET)

Edge-lit with LED's all around:

(Credit: Geoffrey Morrison/CNET)

You get the idea. Potentially, the problem is less localized, leading to issues that could look like this (in the extreme):

An exaggerated illustration of a less localized brightness uniformity issue.
(Credit: Geoffrey Morrison/CNET)

On the other side of the brightness scale, an edge-lit model can have poor uniformity with bright images too. In these cases, the center of the screen will be dimmer than the edges. These will look as you'd expect, given the location of the LEDs. For example, here's an illustration of what a edge-lit LED model with LEDs on all 4 sides could look like.

With a bright image, the center of the screen (the area farthest from the LEDs) can be noticeably dimmer.
(Credit: Geoffrey Morrison/CNET)

With top/bottom, there could be a center band of dimness across the screen, or in the case of side edge-lit models, a vertical band.
Local dimming
Some high-end LED LCD models have their LEDs on the back of the TV, facing towards you. These "full array" LED backlights can have better uniformity, due to their more even spacing across the screen.
Plasma?
Early plasma screens had significant brightness uniformity issues, but in the opposite way. In those days, when trying to display a full white screen, they could look like this:

Old-school plasmas can have brightness uniformity issues as well. Newer models don't have this issue.
(Credit: Geoffrey Morrison/CNET)

In my experience, the uniformity issues manifested itself with mild blotches of "discoloration," due to the demands of creating a full-screen white image.
These days, the design and electronics of plasmas has improved to the extent that you'd be hard pressed to see any brightness uniformity issues with plasma.

What can be done?
Well, for the end user, nothing. But of course manufacturers are spending lots of research dollars into making a better product, uniformity being one of those factors.
There are multiple issues that make a perfectly uniform LCD difficult. The thinner the TV (and therefore the less distance between the backlight and the LC), make a uniform brightness more difficult, given there's less space to diffuse the light evenly. That diffusion itself is problematic, as the better the diffusion, more light could be lost, and that's always a no-no.
Lastly, there's the cost. Brightness uniformity is just one element of performance, and one far down the list of importance (after cost, light output, contrast ratio, color, processing, etc.). A TV is designed to a price, and no matter what, that price is going to require some concessions in performance.
Brightness uniformity isn't something that's easily seen in a store showroom. Therefore, it's easy for engineers to concede some brightness uniformity for better light output, lower materials cost, or whatever else they need.
But even though it's not noticeable in a store (the only thing TV manufactures really care about), uniformity issues are easily seen at home. It's also often mistakenly assumed it's a "defect" with the television. If you watch dark movies, or ones with letterbox bars, it can also be extremely distracting.
This article stemmed from an e-mail exchange between a CNET reader from Maine and our man Katzmaier. The reader had returned several LCDs, as the brightness uniformity bothered him. To him, and to you if you're also bothered by this artifact, I'll offer this piece of sage advice: skip LCD. Get a plasma.


More SONY TV News

See another article below!

JZ

An August 2nd Reuters news story said that Sony is preparing to overhaul its LCD television business to reduce costs and attempt to remain competitive against the likes of Samsung and LG. That means selling off TV factories to Chinese companies such as Foxconn Technology (manufacturers of the iPad) and moving more and more to a Vizio-style rebranding model.

Sony’s TV business has lost money for eight consecutive years, which about as long as Sony has been selling Bravia LCD TVs. The company cut its sales forecast for the current fiscal year by 19% to 22 million units, and now there is talk among analysts of the possibility that Sony might exit the TV business altogether – something that is almost inconceivable, given Sony’s long involvement with television.
Three words: Wake. Up. Call.
But the facts are hard to argue with. Ever since Sir Howard Stringer took over at the helm six years ago, Sony Corporation has lost 50% of its market value. According to the Reuters story, Sony is currently valued at just $25 billion, less than 25% of the market valuation of Samsung.

Over the years, pursuing profitability in the TV business has led Sony to form an alliance with Samsung (S-LCD), announce plans to take a 34% investment stake in Sharp’s Gen 10 LCD fab (later pruned back to less than 10%), and search high and wide throughout Taiwan and Hong Kong to find a competitive source for the smaller LCD panel TV sizes that still dominate the market.

Sony’s initial TV strategy was to position themselves as an Apple-like brand, getting people to pony up a premium for a perceived advantage in Sony product quality and engineering smarts. Trouble was; it was all too easy to surf the Internet and discover that smaller Sony LCD TVs were being sourced from many of the same manufacturers as 2nd-tier LCD TV brands.

Sony’s “own the manufacturing chain” business model was blown out of the water by Vizio, the ultimate OEM TV partner, who spent millions of dollars in advertising and went for the jugular with aggressive pricing in wholesale clubs and discount outlets. And of course, Samsung is responsible for much of Sony’s misery, given how aggressively the Korean TV giant followed its ten-year blueprint to become “the next Sony.”

It doesn’t help that 3D and Google TV have done little to stem the losses. 3D TV is still struggling to gain widespread acceptance and will likely become just another option built-in to all future TVs; one that cannot command a premium.

Google TV is even more of a bust. If you’ve ever had a chance to use the remote control for Sony Internet TVs, you’ll know why: It’s complicated and intimidating to use. People like the idea of watching Internet-delivered video, but they don’t want to search for it with a computer-like interface.
Seriously - Who thought THIS was a good way to watch TV?
To make matters worse, the Sony name doesn’t command respect like it used to. Interbrands’ annual survey of global brands places Samsung 15 places above Sony. That is mind-boggling, given the strong brand equity Sony used to have.

The Reuters story states that Sony could lose close to a billion dollars this year in its TV operations, and that would push total losses to almost $5 billion since 2004. So the question is – how long will Sony continue to spill red ink?

One obvious solution to the problem is for Sony to wash its hands of TV manufacturing completely and instead license the Sony name to a line of OEM TVs, much like Kodak is doing these days with digital cameras and photo frames.

There is a precedent: Earlier this year, CE manufacturing giant Philips threw in the towel on its TV business, citing increasing losses and an inability to remain competitive even on its home turf in Europe. Going forward, Philips has licensed its brand to Funai for all future Philips LCD TV manufacturing.

By following this model, Sony could finally achieve profitability in the TV game. Ironic, isn’t it?

Tuesday, August 2, 2011

SONY TV - this business is not getting any easier!

See the article below on the Sony TV business. Customers are not chasing after features that they feel do not add value to the set. Chip producers have convinced TV makers to shove more features in than a customer wants in a TV. At the end of the day it is about the content, and being able to sit back, relax, and watch a good show or get the news. Until the customer clearly calls for a PC on their main TV of the home SMART TV - Internet TV will fail. Building it and they will come will not work anymore. The economy has all consumers looking at every dollar and considering what they are or are not willing to spend.

Sony Prepares TV Overhaul After 3-D, Google Sets Fail to Revive Earnings

Q
A model wearing 3D glasses stands next to Sony Corp.'s 3D Bravia televisions at their unveiling in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Sony Costing Shareholders 70% Gain by Clinging to TV

Sony Costing Shareholders 70% Gain by Clinging to TV
Tomohiro Ohsumi/Bloomberg
During the past six years, Sony Corp. has lost market share to Suwon, South Korea-based Samsung and Apple Inc. of Cupertino, California, as it struggled to win customers by betting demand for online content and 3-D technology would revive TV sales.
During the past six years, Sony Corp. has lost market share to Suwon, South Korea-based Samsung and Apple Inc. of Cupertino, California, as it struggled to win customers by betting demand for online content and 3-D technology would revive TV sales. Photographer: Tomohiro Ohsumi/Bloomberg
Sony Corp. (6758), facing an eighth straight year of losses from its main television operations, is preparing to overhaul the business to reduce costs and compete against Samsung Electronics Co.
The plans may include partnerships as well as reorganizing the procurement, product development and sales operations, Mami Imada, a Tokyo-based spokeswoman, said in response to queries about a Nikkei newspaper report. Details of the reorganization may be decided this month, she said.
Chairman Howard Stringer, who’s farmed out production to Foxconn Technology Group and eliminated thousands of jobs, may be returning his focus toward cost cuts after 3-D TVs and Internet-centered sets failed to stem Sony’s slide in market share against Samsung and LG. The Japanese company last week replaced its TV head and said it won’t sell as many units as it had anticipated.
“Sony needs to make deeper changes in the structure of its TV business,” said Kota Ezawa, a Tokyo-based analyst at Citigroup Inc. “Selling its factories can only be the first step.”
Sony closed 0.7 percent higher at 1,973 yen in Tokyo trading today, narrowing its loss this year to 33 percent. That compares with the 3.8 percent decline by Japan’s benchmark Nikkei 225 Stock Average.
The Nikkei newspaper reported earlier today Sony will outline plans for its TV operations, citing Chief Financial Officer Masaru Kato.

Back-to-Back-to-Back Losses

The maker of Bravia TVs cut its sales and profit estimates last week, citing sluggish sales of TVs in the U.S. and Europe. Tokyo-based Sony, reeling from three consecutive years of companywide losses, also slashed its full-year TV sales target by 19 percent to 22 million units.
Sony also announced at the time that Yoshihisa Ishida, president of the home-entertainment unit that makes TVs, will be replaced by Masashi Imamura, president of the personal imaging group that produces cameras. Ishida will become a deputy CEO at Sony Ericsson Mobile Communications AB.
In the past two years, Sony has sold three factories, reducing its number of TV plants worldwide to four, as part of the company’s efforts to reduce costs.
Sony agreed last year to sell 90 percent of a TV factory in Nitra, Slovakia, to Foxconn’s Hon Hai Precision Industry Co., after disposing of 90 percent of its largest North American TV-making assets to Taipei-based Hon Hai. Sony also agreed to sell a TV facility in Barcelona in September.

Dwindling Brand

Edmund Ding, spokesman for Hon Hai, didn’t answer calls to his mobile and office phones.
Once worth more than $100 billion, Sony has lost half its market value since Stringer became its first non-Japanese chief executive officer in 2005. The company that invented the Trinitron cathode-ray tube TV in the 1960s is now valued at about $25 billion, less than a quarter the size of Samsung.
Sony may no longer rely on its brand for an edge. Since Samsung passed Sony in terms of brand value in 2005, the Korean company has extended its lead, ranking 19th in Interbrand’s latest annual survey of global brands, or 15 places above Sony.
Clinging to the television business may be costing shareholders. While analysts say Sony shares may climb as sales of its PlayStation game consoles and Cyber-shot digital cameras bolster profit this year, stripping out losses at the TV business from the rest of the company would boost its equity to $43 billion, according to data compiled by Bloomberg.

Biggest Division

By selling the TV division, Sony would exit a business that is forecast to lose almost a billion dollars this year as consumers unwilling to pay for its Bravia flat-screen TVs turn to cheaper brands. The TV unit had 1.2 trillion yen ($15.5 billion) in sales last year, making it the biggest source of Sony’s revenue, data compiled by Bloomberg show.
Shiro Kambe, Sony’s chief spokesman in Tokyo, said yesterday the company has never considered walking out from the TV business because of its importance to the company.
The company lagged behind Samsung and Seoul-based LG Electronics Inc. (066570) in the global TV market last year, with 12.4 percent of sales, according to DisplaySearch. Sony’s share slipped to 11.4 percent in the first quarter.
A strengthening yen versus the dollar and euro is also exacerbating Sony’s losses by making its exports less competitive overseas and reducing the yen value of foreign-currency denominated sales.

Google TV

Sony, which began offering Internet-enabled TVs in the U.S. in October that use Google Inc. (GOOG)’s software and also introduced 3-D Bravia models last year, said last week it expects the loss from its TV business to be as large as the 75 billion yen deficit it reported in the fiscal year ended March.
That would push losses at Sony’s TV division past a half-trillion yen since 2004, or more than $5 billion based on historical exchange rates, data compiled by Bloomberg show.
Stringer has already eliminated 30,000 jobs, sold factories and moved production overseas in an effort to revive earnings.
“The reorganization plan should be big enough to surprise the market,” said Keita Wakabayashi, an analyst at Mito Securities Co. “It may not be easy for Sony to come up with something very new to investors after promoting cost reductions.”
To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net