Showing posts with label LG. Show all posts
Showing posts with label LG. Show all posts

Tuesday, April 02, 2013

Sony’s (Intelligent?) bet on The Idiot Box

Sony India has been Focussing Big Time on its Television Business in India. And it seems to have paid it off well. But then, it will Certainly have to come with Some Innovative Strategies soon if it wants to continue rising up The Ranks.

“It’s a time of transition, which makes things even more difficult”. These words from Osamu Katayama’s book These are our future (which details Sony Corporation’s recent history) aptly describe the phase that this Japanese multinational is going through at the moment. First, a devastating earthquake in Japan. Then, a cyber-attack on its network. And finally, a colossal net loss of $3.1 billion for the financial year ending March 31, 2011 (Sony’s second worst financial performance ever). All this has not only made its share price tumble over 25% since the turn of the year, but has also put an enormous pressure on its chief executive Howard Stringer who is striving hard to win the battle against the odds, one after the other.

In fact, when Howard Stringer, Chairman, CEO & President, Sony Corporation, took over the reins of this Japanese conglomerate in June 2005, its three major businesses – gaming, mobile phones and television – were already losing momentum, globally. Thus, the task ahead for Stringer was not only to save these businesses from collapsing, but also identify functions and markets that could serve as alternative sources of revenue for Sony, at least till the time these businesses were back on track, live and kicking.

Although Sony had been in India since 1994, it was only then that the Indian consumers saw Sony recognising the real potential of this ‘Asian Tiger’. Thus, everything from more launches, slightly more affordable prices, to more stores, to even zero-interest finance schemes, to things which Sony had never done before, were all suddenly happening, and not just in India, but across the globe. Result: Sony’s CPD division, which sells televisions, digital imaging, audio and video products, semiconductors, components and business services, recorded a respectable profit of $35.4 million in FY2010-11, up 1.6% y-o-y, at a time when the core divisions were bleeding losses.

No doubt, the strategy paid it off well across countries, but then India seems to be special, so much so that the company is now looking at the country as a priority market and expects it to become the fourth largest market for its products in the world, contributing as much as 10% to the group’s sales in the next couple of years. In fact, Sony, which started off slow in the Indian market, is now rising up fast in a market dominated by chaebols like LG and Samsung.

Cut to the chase, the focus for the time being is on its television business, particularly the Flat Panel Display (FPD) TV market in India. In fact, as per the US-based market research firm DisplaySearch, Sony has already overtaken Samsung Electronics and LG Electronics for the top position, with 22.1% of flat panel TVs shipped in the Indian market in 2010. Even according to the GFK Nielsen Urban India Panel TV (LCD + Plasma TV) Report (for April-June 2010 period), Sony Bravia (Sony’s flagship FPD product) had become the market leader in Flat Panel Display segment in the first quarter of FY2010. It had grabbed a market share of 32% by value, and 29.5% by units sold. The company had sold more than 1,00,000 units during this quarter, more than the number of units sold by any other brand in the market. For the month of June alone, Sony had captured a significant market share, 33% by value and 29.5% by units. The company reported maximum sales in the states of Maharashtra, Delhi, Tamil Nadu & West Bengal during this quarter. For starters, under the FPD TV market, the 22-inch, 32-inch & 40-42 inch segment comprises of more than 75% of LCD units sold in the country. And interestingly, Bravia was the leader in all the three categories.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist). For More IIPM Info, Visit below mentioned IIPM articles
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Wednesday, January 09, 2013

Can LG bounce back?

LG ruled the Indian consumer durables market for long. But since 2011, it has been struggling to play catch up with the new #1 Samsung. The road to regaining glory isn’t an easy one for LG

LG has no problem getting attention. Just that, it’s unpredictable. No one would have imagined the Korean to return to the Indian market, after its two previous efforts in the late 1980s and early 1900s failed to make any impact. But it did. The very first year (1997), it earned a topline of Rs.136 lakh. By that year, Samsung, Panasonic, Sony, Godrej and others were already busy surfing the high tide in the Indian consumer durables (CD) market. Given its poor track record in the Indian landscape, most didn’t give LG much chance of making it big amongst the Indian diaspora. Ten years later, by 2007, LG had become the largest entity in the CD arena, outrunning Samsung by a handsome margin (topline of LG in 2007 was Rs.8,000 crore, while that of Samsung stood at Rs.5,200 crore).

Then came the slowdown, but someone forgot to tell LG that. The three years that followed saw LG rise to the top of every segment in the CD market, and its revenues rose steadily – two steps at a time or maybe more, doubling within a span of just thirty-six months – from Rs.8,000 crore in 2007 to Rs.16000 crore in 2010. Suddenly, LG had become the new star in the Indian CD market. Samsung was being talked less about. Perhaps it enjoyed the lack of attention and in the process, rose as fast as LG did during the years, if not faster. Samsung’s topline trebled from Rs.5,200 crore to Rs.16,000 crore (Rs.15,935 to be precise). Truth was, no one in India had informed Samsung about the slowdown too!

This story of two canons blazing in the Indian CD market has resulted in an interesting outcome. Quickly back to 1997. Then it was the Samsung-talk-in-town. Post 2007, it was LG ruling. Today, suddenly there seems to be another power shift in progress. In 2011, Samsung outdid LG in the money-making game. Its revenues stood at Rs.20,005 crore (a y-o-y rise of 25.6%), while LG with Rs.16,200 crore (growth of 1.25%) was found floating in stagnant waters. This unsettled the LG India top management, and as per media reports, got the India MD and President Soon Kwon summoning the 30 senior-most folks in the company, to warn them of the road ahead of LG India. He had concerns to share about the manner in which competition was getting tougher. The previous year, there were others besides Samsung who grew at a brisk pace. This list especially included the Samurais – Panasonic, Hitachi and Daikin whose growth ranged anywhere between 20-65%. He also spoke on another issue – how the slowdown in the CD market was here to stay. Understandably so, for the growth in the Indian CD market had plummeted to 6% in CY2011 after growing by 13% in CY2010.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.

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Thursday, July 26, 2012

Florian Müller, Founder, FOSS Patents & Co-founder of Rival Networks

B&E: Will payouts in settling patent infringement cases show on Google’s net earnings from Android?
FM: Since Google itself is rarely sued, the impact on the net earnings of device makers will be greater than on Google’s earnings. The Oracle lawsuit could, however, require Google to pay something on the order of a billion dollars depending on the exact outcome. The extent to which Android is accused of infringement is unpredecented. 42 lawsuits in a little more than a year show that there are fundamental problems. There are definitely some Android-specific reasons, such as Google’s ‘loose management’ of intellectual property issues, that contribute greatly to this mess.

B&E: Some have even pointed to security issues related to the Android OS. Is that something which handset makers and buyers should be wary of?
FM: By emphasising that the software is “free”, Google positioned Android as the poor man’s iPhone. But the security issues come with it. The Android Market is not managed well by Google. It contains programs infected by malware. I use a Samsung Galaxy, a high-end Android phone, and I like it for the most part, but I don’t have confidence in Google’s app store and never buy anything there.

B&E: Android Market Place is not giving Google enough topline push. Are the earnings enough to sustain stable Android OS projects in future?
FM: App stores can but only be a small part of a revenue mix. In Google’s case, there’s not enough money to be made there to sustain development of an OS.

B&E: Finally, will the Andoird connection enable handset and tablet makers like HTC, Samsung, LG, Dell, Acer et al, to make money in times to come?
FM: There are about three dozen device makers who have adopted Android by now and it’s clear to me that when growth rates flatten, most of them won’t make money with Android-based devices anymore. For now the explosive growth of the smartphone market creates some short-term opportunities, but strategically those device makers are in a difficult position because Google controls the platform. Google bullies Android device makers and forces them to do what it wants. Right now the biggest problem for makers of Android-based tablet makers is a lack of demand. Android tablets are a failure so far. They also turn out to be too expensive.


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