Cheap Tv's Proving To Be Disastrous For Manufacturers, Retailers
A glut of big-screen TV sets has pushed prices of the sets down to bargain levels -- a boon for consumers, a nightmare for manufacturers and retailers, the New York Times observed today (Tuesday). The newspaper attributed a 29 percent drop in Best Buy's net income in the last quarter to its decision to slash prices of new TV sets in order to remain competitive. "People used to pay additional to get a Sony Trinitron," Riddhi Patel of market research firm IHS iSuppli told the Times . "But the industry has trained the consumer that any time there is a new technology, if they wait six months the price will come down." Indeed, the newspaper discovered that some television sets are currently selling at 50 percent of what they were fetching a year ago. Early today Sony announced that it plans to sell its nearly 50-percent interest in a company that manufactures LCD screens to its Korean partner Samsung for $940 million. The company, which once dominated the field, is expected to lose $2.2 billion at its TV-manufacturing division by the end of its fiscal year in March.