Full speed ahead.
With the adoption of liquid-crystal display televisions going worldwide and the U.S. switchover to digital broadcasts less than 10 months away, that’s the attitude Sony is taking with its factories as it attempts to ensure it has enough flat-screen televisions to meet the expected surge in demand.
Within the past week, Sony said it will double production of its Bravia LCD sets this year at its Slovakia plant, which serves Europe, to 4 million annual units, and will double the production of its latest generation LCD-panel production line, which it owns with Samsung, to 60,000 sheets a month by next year.
The company is the market-share leader for North American LCD televisions, almost all of which are high-definition sets, garnering 13% of the fourth-quarter LCD units and 23% of LCD dollars, according to DisplaySearch.
“They’ve had a year and a half of tight supply,” said Paul Gagnon, director of North America television research for NPD Group unit DisplaySearch. “They’re buying up every single panel they can get their hands on and selling it.”
Sony’s trying to capitalize on the coming U.S. switchover to digital broadcasts from analog in February. That event has helped drive digital televisions’ penetration of U.S. households to about 50% and likely will help increase the penetration of HDTV to a similar figure, the Consumer Electronics Association said last week.
The switchover, along with falling prices, also helped drive worldwide LCD TV panel shipments, which jumped 69% in the first quarter, DisplaySearch said this week.
In January, Sony said its electronics unit’s fiscal sales for the quarter ended Dec. 31, 2007, rose 10.2%, compared with 9.6% for the company, largely on demand for its Bravia LCD televisions. The electronics’ division’s operating profit fell 7% from a record year-earlier quarter as Bravia prices declined.
The company is likely to continue to drop its Bravia prices for the sake of market share as it ramps up worldwide production, said Gagnon.
“It’s a strategic decision to operate in a little bit of red ink now,” said Gagnon. “If that pushes the weaker competitors out of the market, so be it.”