Published in News
Sony & Toshiba latest to outsource
by David Stellmack on18 August 2008
Price competition too much in LCD arena
Sony and Toshiba have had their plans to outsource a good amount of their LCD Television manufacturing to Taiwanese manufacturers Hon Hai Precision Industry and Compal Electronics and now they are following through with them. Sony will be working with Hon Hai Precision Industry and Toshiba has selected to work with Compal Electronics.
The move to outsource LCD TVs to Taiwan comes as no surprise, as increasing pricing pressure has led to the move in order to continue to keep up with the demand from consumers who want the thin LCD TVs from brand names that they trust at the lowest prices possible.
Right now the majority of the intense competition is in the 30” to 40” segment, which is the segment that continues to see the largest amount of growth. Of course, other Taiwanese factories are turning out LCD sets for a variety of other manufacturers that are putting their branding behind them in an effort to compete in this arena.
While many consumers continue to value quality, reports indicate that many consumers tend to purchase from the brand name that they trust when the prices are close and the amount to be invested is higher than the average electronics purchase. While Japanese players continue to receive a favorable preference from consumers ready to make a purchase, the fact of the matter is that a lot of these products are made from outsourced production.
It is suspected that both Sony and Toshiba will continue to manufacture their highest-end products that have the largest profit margins and are targeted at the videophile audience. Panasonic and Sharp, who are also based in Japan, continue to manufacture their LCDs in plants owned by the company and continue to leverage quality and technology as the key ingredients as to why their products are better.