Sony says Blu-ray sales short of forecasts

Thu Nov 20, 2008 8:11pm EST
 
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By Franklin Paul

NEW YORK (Reuters) - High definition Blu-ray disc players may be one of the holiday season's best sellers, but they will still fall short of expectations, due to the tough economy, the head of Sony's U.S. electronics unit said.

Sales of the next-generation movies players, developed by Sony and sold under brands including Panasonic and Samsung, could benefit from a late shopping spurt as budget conscious U.S. consumers find deals, Stan Glasgow told Reuters in an interview on Thursday.

But they will not meet the worldwide target of 5 million units, most of which had been expected to sell in the United States.

"It's not that far off of it," he said. "Maybe 10 percent off of what we had thought. It's truly one of the items that has performed well during this economic mess."

After the U.S. Thanksgiving holiday on November 27, electronics retailers are expected to slash prices of Blu-ray players -- which originally sold for as high as $1,500 in 2006, -- to as low as $150 per unit, experts said.

Sales of Blu-ray players, which promise higher quality video and audio to viewers with HD televisions, have been hampered by retail prices on movie discs, which can top $30 a piece.

Glasgow suggested that discounted prices for movies could jump-start player sales.

"They (movie studios) need to make money, and the packaged media (discs) is a critical way for them to make money so I understand their problems also," he said. "But I'd love to see those prices come down, as well as the price of Blu-ray players, to drive adoption."

While the new disc standard has enjoyed near exclusivity on electronics retailers shelves this year, after Toshiba Corp pulled the plug on its HD-DVD format earlier this year, Blu-ray still has a long way to go to match sales of standard DVD players. Although the segment is in decline, global DVD player and recorder sales reached 142 million units in 2007, according to research firm In-Stat.

The holiday shopping season is expected to be tough for the entire consumer electronics sector, with shoppers perhaps unwilling to spend after watching the turmoil in the banking, retail and automotive sectors.

Glasgow said earlier on Thursday he doubted that the gadget industry would reach the 3.5 percent growth forecasted by the Consumer Electronics Association for the fourth quarter.

That sluggishness is due in part a slowdown in sales of flat panel, high definition television, such as Sony's Bravia line.

"We expected the TV industry to just skyrocket this holiday season. It's going to grow, but its not skyrocketing," he said. "There are less consumers...willing to spend money. I believe 80 percent of that is just consumer confidence. They don't feel as comfortable making a major investment in a television."

Still, Glasgow thinks that some companies like Sony, established multinational concerns with access to credit, will take advantage of developmental opportunities now that some of their competitors are struggling, in hopes of making more innovative products in the long run.

"Its a good time to reevaluate. I think Sony is in a good position to do that."

(Reporting by Franklin Paul, editing by Dave Zimmerman, Leslie Gevirtz)