Panasonic Aims Low for Big Sales

An article in the Wall Street Journal last week described a new strategy for Panasonic. The company plans to design products with stripped-down feature sets for sale in “emerging market” countries. These are nations that have large populations and growing economies that are likely to have increased demand from consumers with incomes that are limited, at least by developed nation standards. These markets include countries such as Brazil, Russia, India, China, Mexico, and Indonesia. According to the Journal article, this could include items such as flat panel TVs priced as low as $50 apiece.

That’s a stunning target, especially when you think that it was not so many years ago that a 42″ flat panel TV cost about $5,000. Shrinking the selling price to just 1% of that in a few years is quite an accomplishment. Now, the $50 TVs certainly won’t be 42″; they’ll be much smaller, in line with the small CRT sets that are currently the mainstay for these markets. And they will have a much smaller feature set; don’t expect to find them bristling with HDMI connectors or coming bundled with a fancy remote control. They won’t connect to the Internet, and probably will have much simpler controlling electronics which will likely mean lower image quality. But they will be inexpensive enough for the budding consumer classes in these countries to be able to afford them. And if Panasonic can make a few dollars on them and sell them by the tens of millions, it could be a good strategy for maintaining growth in a time when sales projections for the developed nations are forecast to go flat over the next few years.