Sony Corp aims to boost flat TV sales in the next business year from April and will vary its procurement of LCD panels to help lower costs and turn its struggling TV operations profitable, a top executive said.
Raising sales will be a challenge, given that Samsung and LG of South Korea, the world's top two makers of flat TVs, have just set ambitious targets for the year and with market growth expected to slow.
Last week Sony cut its flat TV sales forecast for the year to March by 2 million sets to 23 million, hit by weaker-than-expected demand during the holiday shopping season and a delay in the launch of new models.
Sony aims to beat that lower target in the next year to March 2012, chief financial officer Masaru Kato told Reuters.
We must keep in line with growth in the market, Kato said in an interview at the company's Tokyo headquarters, declining to give a target figure because the plan is still under discussion.
Samsung aims to sell 45 million units and LG 41 million in 2011.
The global LCD TV market is set to grow slightly more than 10 percent by units in 2011, a much slower pace than in recent years, according to research firm DisplaySearch. Developing markets are expected to grow by 28 percent, while unit sales are expected to fall slightly in developed markets.
The maker of Bravia TVs and PlayStation game consoles has been bleeding red ink from its TV division for six years and says it will make a loss again in the year to March, hit by the strong yen, higher than expected panel costs and price competition.
Falls in TV prices also affected profits at rivals Panasonic and LG announced in recent weeks.
Sony will vary the proportion of liquid-crystal display panels it buys from its three existing sources: its joint venture with Sharp, its venture with Samsung and from the open market, as a way to meet market needs and cut costs, Kato said.
We are not going to change this structure, but what we will change is the proportion from each, Kato said. We have to adjust to market needs.
A greater focus on emerging markets could mean increased sales of smaller TVs. That could cut into procurement from Sharp, which is strong in large panels popular in the developed countries where unit growth is not expected this year.
Sony and Sharp are still in talks over their LCD panel joint venture, Kato said. Sony said in 2009 it planned to raise its stake in the state-of-the-art factory to a maximum of 34 percent from 7 percent by the end of April this year, but media reports have said it will abandon the plan.
Sony last week announced a 6 percent drop in operating profit for the October-December period compared with the previous year, but beat market expectations and kept its full-year profit outlook unchanged at 200 billion yen ($2.43 billion).
Shares in Sony fell 1.6 percent to 2,869 yen on Monday, underperforming the Nikkei average, which rose 0.5 percent.
(Editing by Michael Watson and Nathan Layne)