Sony rejection package: reduce LCD TV parts procurement costs

Kazuo Hirai, who will take up his post in April, began his "clearing baggage" job. The new CEO of Sony is faced with a dismal performance. Due to the drag on TV business and the rise of the yen exchange rate, the impact of external factors such as the Great Japan Earthquake and floods in Thailand, Sony was third in fiscal year 2011. With a loss of 2.1 billion U.S. dollars in the fiscal quarter, it is expected to lose 2.9 billion U.S. dollars in the fiscal year. This is the fourth consecutive loss for Sony. In the shadow of huge losses, Sony recently announced that it will launch entry-level TV for China.

It is understood that "entry-level television" adopts LCD panel technology and differentiates Sony's traditional high-end positioning in the Chinese market. TV is relatively close to the people both in terms of function and price, and hopes to maintain the market through high-quality, low-price strategies. Occupancy, this move has also been interpreted by the industry as a destocking behavior under the excess liquid crystal panel situation, one can occupy the market through low prices, and second, through the way to reduce inventory inventory pressure, waiting for the advent of the OLED era.

As demand for color TV sets decreases, inventory pressure on LCD panels increases, and Sharp has decided to reduce production of its LCD TV panel factory by 50% for more than 1 month. Panasonic will use LCDs in Mobara City, Chiba Prefecture. The panel plant was sold to Japan Display at a price of about 30 billion yen, and Sony also made a "shrink" adjustment: it has shelved a plan to increase its stake in its LCD joint venture with Sharp, and by the end of 2011 it will be 1.08. One trillion won (about 5.4 billion yuan) sold all shares (50%) of its LCD panel joint venture S-LCD to Samsung. The transaction was completed at the end of January 2012.

Hirai Kazuo affirmed this approach in his speech on governance after he took office, stating that Sony's continued commitment to LCD TVs with extremely low profits is of little significance, and at the same time it has taken various measures to reduce the cost of parts procurement. Just as Samsung acquired Sony's stake in S-LCD, the two parties signed a strategic contract for the purchase of TV panels in 2012, confirming the 2012 panel partnership. According to reports, the above transaction will significantly reduce Sony's LCD panel purchase cost, and it is estimated that it can save 55 billion yen.

Although it withdrew from the joint venture with the Samsung panel, but Sony still can not get rid of the embarrassment of inventory. Due to S-LCD's joint venture relationship, Sony had previously mastered 19% of S-LCD's panel production capacity. Today, all production capacity belongs to Samsung. However, a large amount of inventory was accumulated in the early stage. At the same time, there is a similar joint venture relationship with Sharp and other panel manufacturers, Sony must share some of the pressure of inventory.

As a result, Sony's intention to introduce all the entry-level TVs using LCD panels is not obvious. Behind the "cheap TV" to the countryside, it is actually used as a channel to clear inventory. For the Chinese market, Sony also plans to implement the LCD TV business strategy announced in November last year. It said that in developing countries, product models specifically designed for the local market should be strengthened. That is, in order to adapt to the Chinese market, it will launch accordingly. Supporting products to improve profitability.

In the future color TV market pattern in China, the three or four-level market will become a venue for major brands to compete for. According to the 2011-2012 China White Paper Consumer Market Development White Paper released by the China Electronic Chamber of Commerce, in 2011, the domestic color TV industry accounted for 55% of the total sales in the primary and secondary markets, which was only 4.5% year-on-year, and was considered by the color TV companies as the main Sales of TVs in first-tier cities such as Beijing, Guangzhou and Shenzhen in the battlefield began to decline. Negative growth occurred for the first time in the year. The proportion of the tertiary market and the total market increased by 3% to 45% and sales volume rose by 17.5% year-on-year.

The price-sensitive characteristics of the tertiary markets are exactly the same as those of Kazuo Hirai's reforms. In this entry-level TV, 3D and other functions are almost eliminated to ensure low prices.

But Sony has not been willing to do so. Hirai said that the contraction adjustment is only a temporary expedient. With its own Crystal Led and OLED technology to develop next-generation TV products, Sony has an opportunity to stand up. The industry generally believes that after 2015, OLED TVs will gradually become popular and become the new industry commanding height. Sony, as the inventor of OLED technology, undoubtedly has more advantages. In the announced strategic adjustment of the LCD TV business, the television business was split into three parts: outsourcing, LCD TVs, and "next-generation TV sets."

According to Li Mingxu, the head of the marketing department of Samsung Electronics, the traditional LCD TV has reached the limit of cost, and it is almost unprofitable. Samsung has stopped selling traditional LCD TVs in the Chinese market, and its LCD TVs have all been upgraded to LED. Sony is concentrating on OLED technology. While launching entry-level TVs to occupy the market at a low price to eliminate inventory burdens, it is actually “changing time for space” to support the adoption of OLEDs in a way that minimizes losses. Overturned.