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JVC and Kenwood to Merge

May 16, 2008 | Author: Ibex Marketing

It’s all but a done deal; in October, JVC and Kenwood will merge into a single company. JVC has been struggling with its line of HDTVs and other consumer electronics products, and there apparently is some hope that merging with Kenwood’s automotive entertainment systems business will provide some sort of synergy that can’t happen as two separate companies. The new entity will be called JVC Kenwood Holdings, Inc.

This is another data point in the consolidation of the HDTV market. Several companies have abandoned rear projection and plasma HDTV production. Pioneer will continue to sell plasmas, but will turn over the production of them to Matsushita (Panasonic). It’s getting more and more difficult for middle tier brands to get retail shelf space; in an extreme example, retail giant Wal-Mart is only carrying about a dozen TV brands, and only about half of which are major brands. (JVC is not on the list.) Other big chains tend to carry more brands, but it’s still difficult to get stores to stock and promote your product.

As the competition gets tighter, expect to see more companies merge, change direction, or come up with some other strategy to try to get their products a place in the market.