Panasonic Says Samsung Began Price War for 3-D TVs
Aug. 30 Panasonic Says Samsung Starts Price War
Haruyoshi Yamaguchi/Bloomberg
Panasonic says the Japanese manufacturers are struggling to sell the new product in the U.S.
Panasonic says the Japanese manufacturers are struggling to sell the new product in the U.S. Photographer: Haruyoshi Yamaguchi/Bloomberg
Panasonic Corp., the world’s largest maker of plasma televisions, said it may fail to meet its sales target for 3-D sets after Samsung Electronics Co. unleashed an “unexpected” price war in the U.S.
“No one can keep up” with price cuts by Samsung in the world’s biggest TV market, Yoshiiku Miyata, the head of Osaka- based Panasonic’s TV business, said in an Aug. 30 interview. “It’s become unclear whether we can reach our target” of selling one million 3-D sets in the year to March 31, he said.
The maker of Viera TVs joins Sony Corp. in saying the Japanese manufacturers are struggling to sell the new product in the U.S. The price war may pressure earnings at makers who expected 3-D models to mitigate the effects of price declines for mainstream flat-screen TVs.
“Samsung is leading the competition as might be expected,” said Nobuo Kurahashi, an analyst at Mizuho Financial Group Inc. in Tokyo. “Even though Panasonic is strong in large plasma TVs, it’s the strength of brand and earnings that’s making the differences in strategies.”
“Samsung will continue to try to provide the best products at reasonable prices,” Chenny Kim, a Seoul-based spokeswoman for Samsung, said by telephone. She declined to comment on the company’s pricing policy.
A Samsung 50-inch 3-D plasma set sells for $989.99, while the same size 3-D Viera with higher resolution is offered at $2,499.99, according to the website of Best Buy Co., the largest U.S. electronics retailer. A Sony 46-inch liquid-crystal display 3-D Bravia model is priced at $2,299.99, according to the website.
Record Profit
In July, Suwon, South Korea-based Samsung, the world’s top TV maker, reported second-quarter net income jumped 83 percent to a record 4.28 trillion won ($3.6 billion). That’s more than four times the combined profit of Panasonic and Sony in the three months ended June 30.
Panasonic, the first major TV maker to offer 3-D sets in the U.S., and Tokyo-based Sony, which plans to sell at least 2.5 million 3-D Bravia models in the year to March 2011, haven’t disclosed shipments of their 3-D products. Prices of 3-D sets are falling faster than anticipated, Yoshihisa Ishida, who heads Sony’s home-entertainment business said last week.
88.3% Market Share
Samsung, which started offering 3-D sets in the U.S. in March, sold more than one million units by Aug. 31, giving it an 88.3 percent share of the U.S. 3-D TV market, the company said yesterday.
Panasonic rose 0.9 percent to close at 1,078 yen in Tokyo trading, trimming its loss this year to 19 percent. Japan’s benchmark Nikkei 225 Stock Average gained 1.2 percent today. Sony, Panasonic’s closest domestic rival, has declined 11 percent this year while Samsung, the world’s top TV maker, has slipped 5.9 percent.
Shipments of 3-D sets will probably reach 3.4 million in 2010 and increase to 42.9 million in 2014, Austin, Texas-based DisplaySearch said in July.
Panasonic, which aims to boost TV sales 33 percent to 21 million sets including 1 million 3-D models this fiscal year, is on track with the sales plan, Miyata said. There are signs of slowing demand in the U.S. and Europe, while it remains strong in Japan and developing nations, he said.
Return to Profitability
The TV operations, which are expected to lose money in the six months to Sept. 30, may turn profitable in the second half, Miyata said. The yen’s sharp gain is changing the business environment drastically “but we are promoting cost reductions and sales of new products to make the business profitable,” he said.
Sony may slow the pace of TV price cuts in overseas markets, given the yen’s strength, Ishida said last week. Overall TV sales are on target, as Japan, China and the U.K. offset the sluggish U.S. market, he said. The company kept unchanged its goal of selling 25 million TVs this fiscal year.
Global TV shipments will probably rise 13 percent to 239 million sets in 2010, CLSA Asia Pacific Markets said in a report last week. Europe, Japan and developing nations including China will drive the growth, while the North American market may stall, according to the report.
Panasonic is counting on 3-D sales in Japan and Europe to offset Samsung’s advantage in the U.S. market, Miyata said. “We don’t plan to follow Samsung in the U.S., it’s impossible.”
To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net.
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