June 11, 2007 5:45 PM PDT
Sony plans TV line for Wal-Mart, Target
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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.
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.
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