The rough seas of the consumer electronics business has caused yet another smaller boat to capsize. Soyo, the maker of Honeywell TVs, has filed for Chapter 7 bankruptcy protection.
The news was first reported by the HDGuru.com blog. An SEC filing from earlier this week states that the company shut down operations on May 5, and filed for Chapter 7. Chapter 7 means the company is planning on liquidating its remaining assets, with no plans to reorganize under a new repayment plant to creditors, as a Chapter 11 filing would allow. The company could not be reached for comment.
Soyo makes LCD monitors, portable hard drives, and Bluetooth ear pieces, but is probably most recognizable since it owns the license to sell TVs under the Honeywell brand name. It's unclear how customers who recently bought Honeywell TVs are to deal with repairs or warranties issued by the company.
While Honeywell wasn't one of the top brands of TVs, its exit from the TV market is yet another sign of the ongoing shakeout taking place in the consumer electronics business. Syntax-Brillian, maker of Olevia brand HDTVs, filed for bankruptcy last summer, shortly after Philips turned over its North American TV operations to Funai.
More recently Pioneer has said it will no longer produce TVs after March 2010
Like Pioneer, Soyo's exit from the TV business was forced by mounting losses, in this case, more than $25 million in loans. Worldwide TV sales dropped 6 percent in the most recent quarter, as consumers find themselves with less discretionary income to spend on gadgets, and as the market for LCD TV buyers becomes increasingly saturated.
The typical way gadget makers deal with declining sales is to introduce new technology. But the TV industry is still years away from the next step of broad availability of OLED (organic light-emitting diode) TVs. They're still prohibitively expensive to produce on a large scale, and most companies working on OLED right now--Sony, Sharp, LG, Panasonic--don't seem to be in a rush.
Until then, expect to see more stories like this one, companies either dropping out of the TV business altogether, combining operations with a competitor, or licensing its brand away in certain markets.