Glasgow and several other reporters provided a generally upbeat report on the progress of the Christmas selling season so far. He did say, however, that LCD television price erosion this year has been about 5% to 7% worse than the company had forecast. Glasgow says he expects price declines in 2007 to moderate, from the 25%-30% drop recorded this year to a 20% to 25% decline next year.
Sony is trying to walk a careful line on pricing its LCD televisions: on the one hand, it is trying to avoid aggressive pricing, asserting that consumers are getting a better and better experience; Glasgow and several other executives were critical of some its competitors in the TV business who have been more aggressive in reducing price to gain market share. Glasgow, in fact, says that the consumer electronics industry in general has become more competitive - “more competitive than I have ever seen it,” he said. On the other hand, the Sony execs confirmed that the company offered some significant unadvertised price cuts on Black Friday in order to stay competitive.
“Value to consumers has never been higher,” says Jay Vandenbree, president of consumer sales for Sony Electronics. “But we need to maintain a competitive balance. We still command a premium, but only to a certain degree. We’ve made a very conscious decision not to be a price leader.”
The Sony execs at the briefing said Sony is spending significantly on marketing to educate consumers about the advantages of high-definition televisions. Glasgow noted that a survey of consumers about high-defintion televisions found just 31% were both familiar with the term and knew what it was; 44% had heard the term, but weren’t quite sure what it means. And rest had no idea what high-defintion television is. Sony said it has trained 15,000 electronics retailer salespeople on HDTV; the company has dispatched close to 1,000 Sony employees to retail stores to both help set up displays and help on the retail floor. The company has even sent retailers sources of high-definition content in the standard called 108op to provide a way for the stores to showcase Sony’s LCD screens.
One interesting thing that came up in the discussion was the fact that there really aren’t a lot of places to get content in the 1080p standard; Glasgow notes that cable and satellite systems do not broadcast in that standard. If you want the full experience, you will mostly have to rely on Blu-Ray DVDs, Glasgow says. (Or you could watch movies in the competing HD-DVD format, of course.)
The Sony execs said the company is seeing strong sales not just of LCD televisions but also MP3 players, notebook computers, digital camcorders and digital still cameras. The company says there also has been a resurgence in home audio equipment, as people buying big-screen TVs also walk out of the store with new audo gear to go with it.
As for the Blu-Ray standards battle with HD DVD, Glasgow says he “hopes it ends quickly.” He notes that Sony has started shipping its first Blu-Ray player, a $1000 model targeted at early adopters. Glasgow says he does not think a dual-format drive using both standards would be possible without having two seperate drives, which would be a costly solution.
On another subject, Glasgow said the company has sold a “substantial number” of its Sony Reader electronic book devices, although he did not provide any numbers. He and the other Sony execs downplayed the idea that a market will crop up for consumer-ripped books, the way consumer-ripped music showed up on the Web and effectively jump-started the MP3 player market. (Wouldn’t be prudent for Sony to go around suggesting that would really drive the sale of Sony Readers would be a ton of free if not exactly legal books waiting for download on the Net.)
Sony shares today rose 13 cents, to $39.74.
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