Over the Black Friday weekend, from November 24 to November 27, Sony cut prices by up to $900 on certain
The move has analysts buzzing as they ponder why the company would do so without advertising and for only four days.
Sony's $1,799 50-inch Wega KDF-50E2000 rear-projection TV, for example, was available for $500 less than the advertised price if purchased within the four sales days. The $3,399 40-inch Bravia LCD KDL-40XBR3 was $600 cheaper during that window, and the $5,999 70-inch KDS-R70XBR2 was $900 cheaper. But anyone who tries to buy those televisions this week will pay full price, likely without any knowledge of the bargain that got away.
All of the Sony's retailers were "aware" of the steep discounts the company planned to offer on its Web site, a Sony Consumer Sales Group representative said. U.S. retailers "were given the same option" to cut prices on TVs--up to $900 on certain models--but whether they did so or not was up to them, the representative said.
Several online retailers were able to take advantage of the sale prices, and a Best Buy representative confirmed that the retail electronics giant also offered the sale prices over the weekend.
But Sony says consumers were not alerted to the sale via advertising. Only thoseor who happened upon Sony's Web site over the weekend would have noticed a 70-inch microdisplay rear-projection TV for $900 off its original price, or a more than 20 percent savings on a 40-inch LCD high-definition set.
It's not clear why Sony conducted the sale without the hoopla normally associated with a big holiday promotion. Sony would not comment on why it did not advertise or why those particular models were discounted. Analyst Stephen Baker of The NPD Group hypothesized that the secret sale could have been an attempt to drive volume on some of Sony's most expensive televisions, though he questioned the motivation.
"I'm not a big fan of unadvertised specials in general because the idea of having a special price, the point is to get people to come buy from you," he said.
One reason might be that competition in the HDTV market is so steep, said Steve Kovsky of Current Analysis. There are dozens of companies fighting with each other to get HDTVs into living rooms, especially in the flat-panel category, he said.
Sony has long enjoyed premium brand recognition in the television category, but it could be starting to feel the heat from companies like Panasonic, Kovsky said. "They need to stay on top and they've had the luxury of having not only best-selling products, but also products that are the most expensive in their class," he said.
There's also the possibility that Sony found itself with a little too much inventory this holiday season, and needed to clear its shelves of HDTVs to avoid higher inventory costs. However,on the consumer electronics market this holiday season, with analysts expecting huge increases in shipments.
They're also expecting huge price cuts, but it's just not clear why Sony would cut prices for just four days of the five-week holiday shopping season if it was trying to keep up with the Joneses among the HDTV suppliers, Kovsky said. TVs are a profitable segment of Sony's business, unlike its newest gaming console, in which Sony is believed to be taking a significant loss on each sale of the PlayStation 3.
Sony also showed an unusual interest inin the PC market, another area in which it has been considered a premium brand. However, it made sure customers took notice of the $599 notebook available at Best Buy with prominent placement on the back cover of Best Buy's circular.
Whatever Sony's motivation for the clandestine sale, it has certainly raised a few eyebrows, Baker said. For one thing, consumers who might have considered buying a HDTV over the weekend, but needed some more time to decide whether to spend half their Christmas budget to watch the college football bowl games in high definition, would now be confronted with a 20 percent price increase.
Also, by not advertising the sale, Sony was essentially catering to customers who were ready to buy last weekend and ready to pay the full price they had expected to encounter, Baker said. "Seems to me they're just giving (customers) money that they didn't expect they would get. It's like handing out dollar bills to everyone that walks in the store. Why would you do that?"