
We’ve reported extensively on the decline of Sony’s stock which has hit a new 25 year low. After the drop in stock prices and the company recording a record $5.7 billion annual loss, many analysts began to reconsider their position on the electronic giant which caused the company’s prospects change to ‘sell,’ down from a ‘hold’ position. While many attribute Sony’s decline the past few years with their inability to compete with Apple in the mobile market, Sony’s woes began nearly a decade ago as consumers and the industry began to transition from rear projection televisions to the newer and thinner LCD technology. Sony, then the largest TV manufacturer, downplayed the new trend and was slow to adapt LCD, allowing room for companies like Samsung to offer more models. As Samsung continues to eat into Sony’s TV share, the company was able to leverage its size for better component pricing and beating Sony in the one area consumers probably care the most about, price.
Despite superior products, Sony has reported 8 years of losses for their television business while this year will likely mark the 9th consecutive annual loss from selling TVs. To get into the growing television business, much like the PC business, many competing companies like LG, Vizio, Sharp, and Samsung soon entered into a price war with one and other, driving the price of LCD TVs down drastically. While the move resulted in better prices for consumer, now like the PC business, there was little to no profits left in each unit sold while other would sell at a loss, hoping to drive up their revenue and making profits else place.
Now, global TV shipments fell for the first time since 2004 resulting in Sony and Samsung, the number 3 and number 1 TV manufacturers, to take a new approach to pricing their televisions which would no longer allow retailers to offer discounts. More details, after the jump.
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