Sony sees big holiday season for electronics

November 6, 2007, 5:32 PM UTC
Sony expects that products like this KDL-46XBR2 TV will be a hit this holiday season. Image: Sony

Never mind the mortgage blues: Sony executives say signs already point to this being one of the best-ever holiday seasons for consumer electronics sales.

During an invitation-only press event Monday night in San Francisco, Sony Electronics President Stan Glasgow said that despite recent doom-and-gloom predictions about fallout from the subprime mortgage mess, he is confident that it will be a healthy holiday season for technology spending. Glasgow’s gauge is based on orders from retailers such as Best Buy (BBY) and Circuit City (CC) and brisk business in Sony’s (SNE) own stores.

Sony’s prediction also bodes well for companies such as Apple (AAPL), Microsoft (MSFT), Nintendo, Dell (DELL) and Hewlett-Packard (HPQ) which always count on strong end-of-year sales to drive their financial results.

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Sony Electronics is so confident that consumers will be ready to spend this holiday season that the unit is launching a major marketing campaign to tout its lineup of high-definition products, including televisions, cameras, camcorders and Blu-ray disc players.

“You’ll see more advertising than we’ve ever done before,” Glasgow said. “The campaign is a little over $100 million. It’s being rolled out very heavily starting this month.”

Sony’s expectations line up with recent numbers; research firm iSuppli expects large-sized LCDs to reach 370 million units by the end of 2007. “iSuppli expects 20 percent unit growth for monitor panels, 35 percent growth for notebook panels and 51 percent growth for the TV panel market in 2007 compared to 2006,” said Sweta Dash, director of LCD and projection research.

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To capitalize on consumer demand, Sony is also trying to reach a broader segment of the market than it has in the past. Glasgow said a 32-inch $799 flat-screen TV that Sony recently began offering through Wal-Mart (WMT) is doing better than expected. The TV was unusual for Sony in that it was designed in the U.S., and its LCD panel didn’t come from Sony’s joint venture with Samsung. In the past, Sony would not have offered such a TV, fearing that low-cost products would dilute its brand.

“Certain consumers can only afford so much,” Glasgow said. “Does that mean we shouldn’t cater to them? I don’t think so. We’re going to design products at much lower price points than we have in the past.”

Wal-Mart was an ideal partner for that type of effort.

“They need help bringing in certain consumers, and our brand helps them do that,” he said.