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When Sony launched the new Bravia LCD TV range they targeted women. The move is paying off in droves as consumers return to the once struggling brand.

Sony is on a roll in the TV market from London to Sydney the Company is burning up sales following the introduction of the Bravia TV range. 12 months ago when flat-panel LCD TV sales started to take off, CRT TV sales leader Sony fell far behind the competition.

Also 12 months ago Sony was getting beat up in the media because of poor results, poor marketing and above all continuous poor decisions by Japanese management who failed to deliver profit margin products that consumers wanted.
But the Japanese consumer electronics giant has staged a stunning return to the top, thanks to its investments in large LCD TVs. Sony led in fourth-quarter TV set sales, based on revenue, says DisplaySearch. The research firm says Sony also is No. 1 in the categories of liquid crystal display televisions and microdisplay rear-projection sets.

In the third quarter, it ranked merely No. 4 in TV set sales, behind Samsung, Matsushita Electric Industrial’s Panasonic and Philips Electronics. “A year ago, we were getting beat up from investors and the press. There was a lot of negative buzz around what was going on with Sony,” said Randy Waynick, senior vice president of the Sony Electronics home products division. “What a difference a year makes. Today it’s a much more positive, optimistic picture coming out of Sony.”
Sony’s new chief executive, Howard Stringer, who took over last June, aims to restructure the company to its former glory. His biggest task is Sony’s huge electronics unit, which has lost money and seen declining sales the last two fiscal years.
Last year, the electronics business accounted for 70% of the company’s $67 billion in sales. Sony’s fiscal year ended Friday. It’s due to report results on April 27. TV sets have been a major driver of sales and profit for Sony’s electronics group.

Bravia Brand Builds Following
Much of the credit for Sony’s recent success in TV sales goes to its bet on flat-panel LCD sets with its Bravia brand, introduced in September. It’s also had success selling its high-end SXRD microdisplay rear-projection TVs, which unlike the flat-panel don’t have thin screens.
Sony has retreated from the plasma television business, except for some corporate and public display markets. Sony officials decided that consumers ultimately would choose LCD over plasma in the most popular screen sizes. Plasma TVs have had a price advantage over LCD in larger screen sizes, but LCD is closing the gap. LCD technology affords better resolution than plasma. And LCD sets are thinner and lighter than plasma sets.
Sony’s 40-inch Bravia LCD television “hands down killed the competition” last year even though it cost at least 20% more than rival products, Waynick said. It took business away from 42-inch plasma TVs, he says. Sony’s 40-inch Bravia LCD TV retails for $3,000.
People will pay a premium for the Sony brand because of its reputation for quality, Waynick says. Analysts say the Bravia boasts superior picture performance in attractive frames. Sony designed the TVs to appeal to women, who often make such purchase decisions.
“These things are going to be hanging on the wall in living rooms and family rooms, and it can’t be just an ugly piece of metal,” Waynick said. “It has to strive to be more like art and to blend into the interior. We think the Bravia represents that focus on design and detail.”
Sony’s ramp-up of its digital TV business comes at a key time. High-definition TV sales, especially LCD and plasma, are accelerating and poised to enter the mainstream consumer market.
Sony offered six LCD TV models last year and expects to have many more models this holiday season, Waynick says.
“You’re going to see a much stronger, more dramatic presence from Sony in the category because the business is growing,” he said. “You’ll see far more screens and large screen sizes from Sony this year.”
A healthy TV business helps Sony’s other product lines, including high-definition camcorders and the coming Blu-ray Disc players, set to debut this summer. Blu-ray is one of two types of high-def digital video disc players vying for this next-generation market.
Sony lost market share in 2004 and most of 2005 because it was slow to shift into flat-panel televisions. It relied too heavily on older cathode ray tube, or CRT, sets. It had to rely on other manufacturers for its flat-panel displays because it didn’t have its own production facility then.
And the flat-panel TVs it did sell were overpriced, analysts say.
But Sony opened an LCD plant last year, with production ramping up in the third quarter.
‘Pretty Sudden Change’
Sony distinguished its LCD televisions with technologies for better picture quality, says DisplaySearch analyst Ross Young. Those technologies include a wider colour gamut backlight for richer colours, especially deeper reds that really stand out, and a unique image-processing system, he says.
Sony’s comeback in the TV market was dramatic, Young says. “It was a pretty sudden change,” he said. “Before Bravia launched, they were No. 3 (in LCD TVs in the U.S.). Within two weeks they were No. 1.”
During the first three quarters last year, Sony trailed rivals Sharp, Philips and Samsung in LCD TV revenue before grabbing the No. 1 spot in the fourth quarter. That quarter, Sony had the No. 1 overall TV market share worldwide by revenue with 14%, according to DisplaySearch. Samsung, which was No. 1 the preceding quarter, was second with 11%.
The run in to Xmas  boost was enough to give Sony the No. 1 position in worldwide TV sales for all of 2005. For the year, it was tops with 11% market share. Samsung was second with 10.2%, followed by Panasonic with 8.8%.
For now, Sony appears to be backing the right technology. LCD television revenue rose 137% in the fourth quarter over the prior year. Plasma TV revenue grew 109%.
“Sony benefited from a focus on larger LCDs whereas other companies are either focusing on plasma or splitting their focus on LCD and plasma,” said Ross Rubin, an analyst with NPD Techworld.
Sony struggled the last two years in the TV market, but its brand remained strong, says Bob O’Donnell, an analyst with research firm IDC.
“They fell more in the minds of industry watchers,” he said, “than they had in the minds of consumers.”

 

Parts of this story are the copyright of Reuters.

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