Samsung Electronics who yesterday tipped a record US$4.1 Billion profit is set to hurt the struggling Sony claims analysts as the Korean giant looks for further growth in the highly competitive consumer electronics market.
Earlier this year Samsung Australia boldly went after the 3D market. Now they are in a head on battle with LG, and shortly Panasonic, as Sony struggle to get traction in the TV market despite the Japanese company spending hundreds of millions sponsoring the FIFA World Cup.
Days after announcing their 3D TV campaign last month, Sony Australia was forced to cancel a PS3 giveaway due to a lack of stock.
In Australia Samsung is the #1 TV brand.
Globally Samsung is the world’s No. 1 maker of flat-panel televisions and they are hoping to sell 50 million TVs this year which is a 32 per cent increase on their 2009 sales.
It’s a faster pickup than analysts expect across the industry. Citigroup, for example, forecasts a 20 per cent increase in flat-panel TV sales this year.
The Wall Street Journal claims that this sort of growth poses a serious threat for Sony who have been losing TV market share to Samsung both globally and in Australia.
Another big issue for Sony is the outsourcing of production with a great deal of Sony products now made by third party companies. Samsung on the other hand is designing and making a lot of their products including components such as memory and hard drives.
The Wall Street Journal said that a turnaround in Sony’s TV business is critical to Sony’s hope to right its ship.
Analysts in Japan and the USA have little faith in Sony’s ability to turn the company around due to pressure from manufacturers like Samsung, LG and Panasonic.
The WSJ concluded by saying that TVs account for one-fifth of consumer electronics sales at Sony. Put together with a strong yen, Samsung’s plans make Sony’s profit targets, plus a goal of selling 60 per cent more televisions this year than last, look overly optimistic.