Sony, who are struggling to regain lost ground in the Australian flat panel TV market is set to use controversial Taiwanese manufacturer Foxconn who have extensive factories in China, to make their high end TVs. Foxconn whose working conditions are currently under investigation following a string of suicides will make the new thin Sony Bravia high end models.
Sony, who no longer manufacture a lot of their own products, is struggling to return to profitability due to falling sales and a move by consumers to new premium brands. Engadget described the move to Foxconn as potentially bad news.
According to DigiTimes in Taiwan Sony is expected to use Foxconn to produce frameless ultra-thin models and another Chinese company, Wistron, to produce their Google TV which is expected to go on sale in Australia next year.
DigiTimes said that in order to save its precarious TV business, Sony has been selling its overseas LCD TV manufacturing plants, increasing its outsourcing and expanding its line-up of lower-cost models in an effort to generate sales.
In Australia, Sony is using their cheap Bravia TVs which are made by third party manufacturers to drive a discount war with brands like Panasonic, LG and Samsung.
Globally Sony is expected to reach its shipment goal of 25 million LCD TVs for the 2010 fiscal year ended March 2011 by increasing sales to third world countries like India and Africa using their low cost, made in China products. These are the same products that are now being sold in Australia.
Sony indicated that its outsourcing strategy for LCD TVs will remain unchanged and will continue to focus on increasing competitiveness, but the company declined to comment on its orders to an individual manufacturer.
Analysts claim that Sony will release significant orders to Foxconn as the Taiwanese company recently took over Sony’s struggling LCD TV assembly plants in Mexico and Slovakia, making Foxconn the largest manufacturer for Sony with 16-18 million units of orders.
Although OEM orders will remain as the majority party of the total orders from Sony, Foxconn’s affiliate LCD panel maker Chimei Innolux (CMI) is expected to benefit and supply TV panels for about 40-50% of the total orders.