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23 May, 2012

Sony and Samsung enforcing minimum pricing on TVs

Sony and Samsung enforcing minimum pricing on TVs
By Sam Byford on May 23, 2012 04:53 am

Samsung and Sony have both started restricting retailers from offering discounts on TVs. The Wall Street Journal reports that the move is designed to protect both the manufacturers' margins and the retailers' profits by preventing "showrooming," where customers check out models in person before buying them for less online. Showrooming was reportedly behind Target's recent decision to stop carrying Kindle hardware, with a source citing a "conflict of interest" in promoting Amazon's products.

Apple has similarly strict policies, and Sony itself already controls the retail price of certain products such as game consoles. However, there is concern that the enforcement of minimum TV prices could drive customers to products from competitors that allow discounting, such as LG and Panasonic. Last month we saw hikes of over $1000 on Sony sets that seemed to confirm its move to a premium pricing strategy, and minimum prices for Samsung's 2012 HDTV lineup leaked back in February. Samsung has also said that it's comfortable with placing a relatively high premium on its laptops.

While it certainly isn't surprising that Sony needs to take drastic measures to put its TV business back in the black, Samsung's division is in fairly rude health. It's understandable that the Korean manufacturer would want to maximize profits, but its ability to compete on price has been instrumental in eclipsing its Japanese rivals. We're not sure how this will end up working out for Samsung and Sony, but one thing is clear — we shouldn't expect to see their TVs on sale anytime soon.

Source: THEverge

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