June 11, 2007 5:45 PM PDT

Sony plans TV line for Wal-Mart, Target

SAN FRANCISCO--Sony will soon be selling a line of televisions specifically for Wal-Mart Stores, Target and other discount retailers.

Without revealing too many other details, Randy Waynick, Sony Electronics' senior vice president of marketing, said Monday that the company would supply a "unique series of models" of liquid-crystal display (LCD) televisions to big-box retailers for availability in the next 60 days. It's part of the company's strategy to sell to targeted groups of consumers. That means smaller specialty electronics sellers will also be supplied specific models, so they won't be competing as directly with the largest retailer in the world, Wal-Mart.

Although Sony ranks as the top seller of televisions, the company (like all established electronics vendors) is facing increased competition from new companies offering cheaper sets. Often, these companies avoid the electronics superstores and sell their products in club stores and big-box retailers. The new sets will allow Sony to better fend off newcomers without alienating its traditional partners by selling the same sets in different stores for the same price.

"The 50-inch starts to be the baseline size to have maximum exposure to high-def."
--Stan Glasgow,
president, Sony Electronics

Sony executives revealed that part of its strategy in a media briefing here. The company's television business was a main point of focus, and Sony Electronics President Stan Glasgow said his business was bucking flat-panel television industry trends. Though multiple new suppliers entering the television business have pushed down average selling prices--by about 3 percent across the industry, according to Sony's numbers--Sony's average selling price is up 10 percent.

The company has been pushing design and personalization with its line of Bravia televisions. Its best-selling display is a 40-inch LCD, compared with 32 inches for the rest of the industry. The current average price in the industry, $1,999, has come down 20 percent to 25 percent in the last year, Waynick said.

Declining prices and more sellers in the marketplace could also explain Glasgow's assertion that 50-inch sets are going to be the standard for watching high-definition content. "The 50-inch starts to be the baseline size to have maximum exposure to high-def," he said.

Sony is also in a major push with its next-generation disc format, Blu-ray Disc. It announced last week that it would slash an extra $100 off the price of its newest Blu-ray player. Standalone Blu-ray players have been off to a slow start. In 2006, only about 100,000 standalone Blu-ray players (not counting PlayStation 3 consoles) were shipped in the United States. Sony, though, is projecting 5 percent to 6 percent growth in those numbers for 2007.

Glasgow dismissed concerns about piracy. When asked about the content protection codes of both the HD DVD and Blu-ray formats being cracked, he said, "We assumed they'd get cracked...that's part of the game." He said this was to be expected when software hackers are so prevalent these days.

And don't look for a combination HD DVD/Blu-ray player from Sony anytime soon. A dual-format device would be very expensive and doesn't make sense for the future, Waynick said. "It's just a short-term Band-Aid some manufacturers are choosing to apply," since there will be a format winner eventually, he said.

Sony also offered some other interesting tidbits:

• The company is moving almost exclusively into 1080p-resolution televisions. Though it will sell some 720p sets, those will mostly be entry-level displays.

• Expect a greater push on getting Web content directly from the television. The $299 Bravia Internet Video Link, coming later this year, will let Sony television owners get videos and other content from the Web directly on their televisions without having a PC in the mix. Right now, Sony has only four content partners, but the list is expanding.

"We will try to get as much content as we can," Glasgow said.

• Though Apple has eaten up most of the market for portable audio, Sony says it will relaunch the Walkman brand in the fall. Sony will tweak its home audio products so that there will be better interoperability between portable and home products. "It's not going to damage Apple's market share," Glasgow admitted, but he said Bluetooth capability will be featured heavily on the products.

• Not to anyone's surprise, Sony will be backing away from other types of television that aren't LCDs. Though it continues to make, for instance, microdisplay rear-projection televisions, and has fine-tuned the technology to bring the size way down--to 10 inches deep--it doesn't have much hope for microdisplays' future. "Microdisplay is going down. It's a declining industry," Waynick said.

• Sony Reader 2.0: "I'd like to sell a hell of a lot more than we're selling," Glasgow said with a laugh. Still, Sony will be issuing a new version, but he declined to say when.

• The Mylo, a handheld communicator that debuted last year and is aimed mostly at college-age buyers, is also getting a refresh, though sales weren't necessarily spectacular.

• Sony will bundle more too. Rather than try to sell individual products, the company will look to sell bundles or packaged solutions at different customer segments. Recently, for instance, some Japanese engineers visited a U.S. fraternity house to check out how technology was being used. Expect to see products like televisions bundled with PlayStation 3s.

The company has already had success in tweaking products and actively marketing to Hispanic communities in the U.S., said a spokesman. Some keyboards on Vaio computers for Spanish speakers are adjusted to make some more commonly used keys easier to reach.

• Glasgow declined to discuss the chaos in the games division, Sony Computer Entertainment, other than to say that he knew the PS3 "would be a huge investment for the company" just as the PlayStation and PS2 were, and that he still believes the console will be successful. The two divisions are working very closely.

• Sony will come out with an 11-inch television based on an organic light-emitting diode screen in Japan this year. Larger screen sizes and wider markets will depend on demand and how the technology evolves.

• Sony's LCD television buyers are older than they thought--more than one-third of sales are to consumers older than 50 years.

CNET News.com's Michael Kanellos contributed to this report.

See more CNET content tagged:
retailer, Wal-Mart Stores Inc., Glasgow, Sony Corp., electronics

12 comments

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hmm
It is not like Sony has a rep for quality, but they should ask Levi about doing business with Wal-Fart.

Levi took a hit in their reputation as a producer of quality clothes when they decided to sell low quality clothes.

People who shop at Wal-Fart obviously don't care about quality, so why bother making lower quality name brand products for the store.

It is not like smaller chains and shops can't compete with Wal-Fart in electronics. Look at their TV's, Stereos, DVD players, and computers. Low grade crap. If you want quality electronics, you go anywhere but Wal-Fart. So what is the point other then Sony wanting to slum it?
Posted by MSSlayer (1074 comments )
Reply Link Flag
You misspelled Wal-Mart
Your argument would have more credibility if you didn't confuse
the nation's largest retailer with a form of flatulence.
Posted by thriftyT (52 comments )
Link Flag
Wal-Mart quality
Whether or not you like Wal-Mart, they do sell many products identical to those sold elsewhere including many items that are not low grade. I know you love to bash people, but come on! Are their iPods any different? How about software? The brand name food products and other consumables?

Just because someone shops at Wal-Mart for some things doesn't mean anything about quality preference.
Posted by ddesy (4336 comments )
Link Flag
Sony TV Products
We recently purchased a TV from Wal-Mart and it did not last even a year and then just stopped working. Then we bought a SONY DVD player last year it was the most expensive wal-mart had and it lasted just long enough for the warranty to run out. It's like they plan for these things to last just long enough and then you have to go buy another. Is that in their Wal-Mart/Sony manufacturing plans also?

<a class="jive-link-external" href="http://www.forestpix.com" target="_newWindow">http://www.forestpix.com</a>
Posted by forestwander (10 comments )
Reply Link Flag
Math
Let's do some math:
If: Wal-Mart = Crap
And: Sony = Crap
Therefore: Wal-Mart + Sony = Big Pile of Crap

So this gives me one less reason to go to purchase crummy Sony products from America's sh*ttiest retailer.
Posted by Professor Cornbread (51 comments )
Link Flag
And this is news, why?
Products made for a specific retailer has been and industry practice for decades. Early on the differences were mostly cosmetic. As time went on and producers used more and more integrated circuitry a feature or two was disabled to differentiate the product.

Oh, and the model number was changed so the retailer could offer a matching/better price guarantee for the same item with the full knowledge that it could never be met.
Posted by BubbleMemory (6 comments )
Reply Link Flag
One less reason to shop at Walmart, Sony....
With the past experiences of bad quality control and poor service with Sony products I will not buy another Sony product if my life depended on it, Especially if my life depended on it.
Sony support is non-existent and they are way over priced.
Posted by fred dunn (793 comments )
Reply Link Flag
The New Kenmore
This is the same thing Sears has been doing since the middle of the last century. Smart consumers will see though it.
Posted by vidyman (18 comments )
Reply Link Flag
WAL-MART avoids price matching by selling special models. Even Tires.
WAL-MART loves to sell special model numbers for two reasons.

1. They can avoid price matching (have you noticed they no longer advertise "Always THE lowest price" or "Always THE low price" Instead its simply "Low prices"

Price a shower Head at wallies (about $8 last time i looked,) and at ACE Hardware (about $4.) Even though they are identical, you won't get a price match because they are not the same brand.


2. Frequently, for example tires, wally forces manufacturers to create a lower priced version of an item.

...

Of course if faced with competition, they will lower the price below cost on a key item (for example those little bottles of paint for model builders) until the local (hobby in this case) store is driven out of business.
Posted by disco-legend-zeke (448 comments )
Reply Link Flag
Wal-Mart's Sinister Phase II
I believe that Wal-Mart has begun to change its business practices. Initially, they would over-build; saturate the market with more Wal-Marts than people needed and sold goods AT A LOSS for years, just to kill off the mom-and-pop stores and traditional retailers. They then identified the performing stores, and the losing stores, and closed the losing ones knowing that people had to shop at Wal-Mart because their competition has gone out of business.

So now that they have a large group of people as regular customers because they don't know where else to go, they can start gradually raising prices and turning a huge profit. Even though they no longer have the lowest price, and rewrote their catch-phrases, people have the PERCEPTION that they still have the lowest price and will continue to shop there.

Why? Basically because we are creatures of habbit and generally idiots when it comes to consumerism.

Solution? Shop around, and shop online...just not at Wal-Mart.
Posted by Professor Cornbread (51 comments )
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