2010-08-10 10:27

A model poses next to Sony Corp's new 3D Bravia television during an unveiling in Tokyo on March 9. [Photo / Agencies]

Sony Corp's and Panasonic Corp's ambitions for higher earnings this year depend on convincing Yin Weiguang, a retired construction worker in Beijing, that he chose the wrong television.

"I don't really care about fancy features," said Yin, 55, who paid 2,799 yuan ($413) for a 32-inch set made by Skyworth Digital Holdings Ltd. "I just use it for basic entertainment: watching news, weather forecast and TV series."

Sony and Panasonic, the world's two largest makers of consumer electronics, are slashing some TV prices by a third in China after being outsold 6-to-1 by Shenzhen-based Skyworth. Sony aims to double TV shipments in China this fiscal year, and Panasonic expects 50 percent growth in the world's second- largest market for flat-panel TVs.

"The price battle in China will likely intensify as local manufacturers, South Korean makers and Japanese companies all fight for market share," said Yoji Takeda, who heads the Asian equity management team at RBC Investment (Asia) Ltd, which oversees $1.1 billion. "Prices will probably continue falling with increased market supply during the second half."

In December, Sony offered a 32-inch set for 3,000 yuan, or 33 percent off the previous low price for that size, targeting customers in regional cities and rural districts, said Yuki Shima, a spokeswoman for the Tokyo-based company. To help cut costs, Sony has increased outsourcing of television production to Foxconn Technology Group, the world's largest contract manufacturer of electronics.

50 Percent Cut

Panasonic, the world's biggest maker of plasma TVs, may cut prices of some models in China as much as 50 percent this year, Hitoshi Otsuki, senior managing director of the Osaka-based company's overseas operations, said in an interview last week.

"The market is totally different from the US and others," Otsuki said. "In China, domestic manufacturers are very powerful, especially in low-end products. The smaller sets are the fastest-growing area and the most difficult for us."

Sales of liquid-crystal-display (LCD) TVs in China will rise 15 percent to 45.5 million next year and overtake North America shipments, according to DisplaySearch estimates. China will become the biggest flat-panel TV market, including plasma sets, in 2012, according to the Austin, Texas-based researcher.

Skyworth leads China with a 15 percent share of the market, followed by domestic rivals Hisense Electric Co and TCL Corp, according to AVC Consulting in Beijing.