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Sony unprepared for flat-panel TV demand

The consumer electronics giant is having trouble meeting soaring demand for flat-panel televisions, a senior executive says.

Reuters

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Dec. 27, 2004 12:00 p.m. PT

2 min read

LONDON--Sony, the world's largest consumer-electronics group, is having trouble meeting soaring demand for flat-panel televisions as its assembly lines did not gear up quickly enough, a senior executive said.

"We are having trouble meeting demand in flat TVs," Chris Beering, president of Sony Europe, told Reuters on Friday, adding that the assembly lines were working flat out. "I do not think there is overcapacity in assembly." There was no problem in the supply of the panels.

The bottlenecks at the Japanese firm's own plants come at an awkward time ahead of the Christmas shopping season, when 30 cents in every dollar spent by consumers on electronics goes on televisions, and much of that to the new flat TVs.

Beering said these were "anxious times" for Sony as it was busy catching up with Dutch rival Philips Electronics, which is leading the market for flat televisions in Europe.

Beering said that in the six months to end-September, Sony Europe's sales rose 5 percent, and a big factor behind the increase was flat-panel television sales.

Sony had a market share in Europe of 15.8 percent at end-September, up 2.5 percentage points, compared to Philips' 18.8 percent. Beering added that since that month, new Sony products had caught on well, and Sony's market share was up.

A key component in flat screens is indium-tin-oxide (ITO), which is pasted on the glass. Surging demand for flat-panel display TVs and monitors has driven indium metal prices to $900 per kilogram, the highest level since 1939.