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HDTV Slowdown? Ask Sony!

October 24, 2008 | Author: Ibex Marketing

I’ve been writing about how bad the HDTV market is going to be this winter, and yesterday, a big shoe dropped. When times get tough, you’d expect that the middle and lower tier companies might struggle, finding it more difficult to get shelf space and make sales. You’d think that the blow would be buffered a bit for the top brands, since they are well established and the people with money will still buy the best.

Well, Sony announced revised forecasts for the rest of its fiscal year (ending in March 2009), and the revisions were sharply downward. In July of this year, the company forecast “operating income” of 470 billion yen. (If you’re like me, my eyes tend to glaze over when I see values in foreign currencies. US$1 is roughly 100 yen, so we’re talking about $4.7 billion.) Now the company is predicting that it will be about 200 billion yen, a drop of 270 billion yen (and more than half of the original forecast). Thats about a $2.7 billion drop. Yes, that’s billion with a very big B.

Now a large portion of this revised forecast has to do with changes in foreign exchange rates and stock market declines, but the part we’re interested in is the downward revision for electronic sales. This includes Sony’s LCD HDTV business, as well as their digital cameras and other electronics. The forecast has been revised downward by 90 billion yen, or about $900 million. Yikes. Sony cites increased competition and slowing economies worldwide as the cause for decreased demand for their products.

These are big numbers, made by one of the biggest names in the business. It’s just one more data point that indicates that we’re headed for a flat panel train wreck this holiday buying season, and I expect that there going to be bargains to be had (provided that you got your discretionary cash out of the stock market in time).