Pioneer had the best plasma TV in the world according to the critics and Sharp is one of the best manufacturers of LCD TV’s. Yet, despite, this the company is bleeding losses and sales of their award winning LCD TV’s are plummeting.
Yesterday the company reported a $2 Billion dollar net loss and a decline in sales of 16.7% as at March 31. For the same prior period the company reported a profit of $1.4 billion.
Earlier this month Sharp President Mikio Katayama said that that the company had made several mistakes during the past year which he regretted.
One of the mistakes may have been buying a 14% controlling stake in Pioneer Electronics, a company who, through poor marketing and inefficient manufacturing, was unable to return any profits from their plasma TV operations. Pioneer quit the flat panel TV market earlier this year with losses of over $800M.
In Australia, Sharp is fast earning a reputation for poor marketing with senior Harvey Norman executives admitting recently that while Sharp had excellent LCD TV’s but their “poor marketing and lack of marketing expenditure” up against the likes of LG, Samsung and Sony was restricting sales.
The latest figures was Sharp’s first loss since becoming a public company in 1956 and they are one of the many firms in Japan’s technology sector that is seeing profits disappear as a global slowdown saps demand.
The problem is compounded by a strong yen eating into earnings from overseas. Sharp has also been hurt by a steep decline in demand for LCD products, its main business area.
While Sharp overall reported an overall decline in sales of 16.7% their consumer electronics division was down 18.6%.
TWICE Magazine said that while unit sales of LCD TVs increased, mobile phone and audio sales “declined significantly” due to a sluggish domestic market. Sales of information equipment were down 14.4 percent, with the company reporting sales of copiers/printers and facsimiles decreasing.
In electronic components, sales of LCDs were down 16 percent in yen from the previous year. But sales of large-sized LCDs for TVs, and small- and medium-sized LCDs, mainly for mobile phones, decreased due to “significant price declines,” Sharp said.
In forecasting for the new fiscal year, Sharp said there are “some favourable factors heading towards recovery” but that it expects the “business environment will remain unpredictable and uncertain for a while.”
Sharp is forecasting a 3.4 percent sales drop to just more than $28 billion but net income of more than $30 million.