World’s largest TV makers, Samsung and Sharp, have started enforcing minimum prices on their sets. This is in an effort to help their brick-and-mortar retailers and improve margins in the competitive HDTV business.
Enforcing Minimum Prices to Help HDTV Sales
Last month, Samsung and Sony enforced a new policy to set minimum prices for their HDTV. Both companies hope that their move will prevent their device’s selling price from decreasing further. Selling price for their HDTVs has fallen to 15 percent for the last two years at $545.
The strategy is almost similar to what Apple does to it devices, as the Cupertino-based company has strict rules when it comes to pricing their products. Their policies with third-party resellers guarantee that they can maintain their margins.
Meanwhile, Sony previously set minimum prices for its PlayStation consoles and Handycam camcorders. However, enforcing a minimum price for their HDTVs is a new policy. This move, on the other hand, is viewed by analysts as something that is risky. That’s because Sony is only joined by Samsung in this movement, which means that other TV makers such as LG, Panasonic and Sharp could see continues sales growth by giving steep discount at online retailers.
Spinning Off Their LCD Manufacturing Business
Because of the significant effect of the struggling HDTV business, Samsung was prompted to spin off its LCD manufacturing facility into a separate company last April. They are hoping that it will merge with Samsung Mobile Display and will become competitive afterwards.
On the other hand, Sharp was compelled to sell 10 percent share of its LCD business to Foxconn last March. After seeing the largest deficit in their long history, the TV maker was compelled to sell their shares to the Apple device assembler for $808 million. This is in hopes that the move will create demands for products that will be manufactured by Sharp’s LCD factory in Sakai, Japan.
In addition, industry watchers see the move as a strategic partnership between the two manufacturers, in an attempt to produce panels for Apple’s rumored television set. There were claims that the iPhone maker is interested in using Sharp’s Indium Gallium Zinc Oxide technology in producing panels for an expected TV product.
The Apple TV
Since last year, rumors of an Apple TV have continued to gain traction after biographer Walter Isaacson revealed that the late CEO Steve Jobs had figured out how to make a simple HDTV. According to the biographer, Jobs “wanted to do for television sets what he had done for computers, music players and phones: Make them simple and elegant.”
They were also believed to shake up the struggling television market with their ability to sell millions of marginal products. In fact, one analysis issued last week suggests that Apple television could double the annual spending of an average American household on Apple products to $888 by 2015.
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