TOKYO – Televisions are about to get cheaper.

Sony on Friday gave up on a goal to profit from TVs this fiscal year and Panasonic forecast price drops will deepen this quarter. Earlier, Samsung Electronics predicted “severe” competition for the year-end season, echoing comments from LG Electronics on Thursday.

Projections from the world’s four largest TV makers signal the industry will fail to capitalize on the biggest sales quarter of the year, with some analysts predicting prices to fall as much as 25 percent in 2010. Companies from Microsoft to Intel are increasingly counting on corporate demand as consumers are reluctant to shop.

“There’s going to be a price war this Christmas season and there’s no way around that,” said Tsutomu Yamada, a market analyst in Tokyo. “The whole strategy this year is ‘sell earlier and sell for less.’ That makes life miserable for the manufacturers.”

TV makers were betting earlier this year that pricier LED TVs with brighter screens or 3D sets would keep prices from falling the typical 20 percent to 25 percent annually, according to Atul Goyal, a senior research analyst at CLSA Asia-Pacific Markets in Singapore. That bet hasn’t materialized as pessimism has increased recently and U.S. shoppers aren’t willing to pay extra for higher quality sets.

“Consumers are saying, ‘I like the product but I don’t want to pay a 30-percent premium to the other one. I’ll wait,” Goyal said. “Prices will have to come down. That’s a given.”

Retailers like Target and Wal-Mart are sweetening discounts ahead of the holiday season to move merchandise as joblessness hovers near a 26-year high. Target, the second-biggest discount retailer behind Wal-Mart, said this month it would lower prices on more than 1,000 toys to attract shoppers.

Sony Chief Financial Officer Masaru Kato said the maker of Bravia TVs is forecasting a loss from the business this fiscal year and the company is bracing for “harsh” competition. Sales of 3-D sets, projected to account for 10 percent of the 25 million annual TV target, are trailing Sony’s expectations, he said.

While Tokyo-based Sony raised its full-year net income forecast 17 percent to $867 million Friday, the world’s third-largest TV maker attributed the increase to better-than-expected earnings from games and computers.

Full-year profit at Sony’s main electronics unit that makes TVs will be lower than anticipated in July, the company said today, without specifying numbers.

Panasonic, the world’s biggest maker of plasma TVs, said falling prices, the stronger yen and more expensive raw materials prevented the maker of Viera TVs from raising its full-year profit forecast even though earnings during the first half exceeded the company’s projections. The yen trading near a 15-year high against the dollar isn’t helping.

 

Copy the Story Link