> Mitsubishi's U.S. Unit Has Plans To Stop Selling Tube Televisions
>
> January 19, 1998
>
> By EVAN RAMSTAD
> Staff Reporter of THE WALL STREET JOURNAL
>
> Mitsubishi Consumer Electronics America Inc. will stop
> selling tube-based television sets in the U.S. later this
> year to concentrate on projection, digital and flat-panel
> units.
>
> In doing so, the unit of Japan's Mitsubishi Corp.
> conglomerate will become the first major manufacturer to
> devote all of its resources to advanced sets and abandon
> the screen technology that has been standard since the
> invention of TV in the 1920s.
>
> The company said its decision was influenced by the
> declining profitability of so-called direct-view TVs with
> diagonal screen sizes of less than 36 inches, as well as
> a desire to stake out a leading role in digital TV.
> Production of the standard televisions will cease in
> March, though because of inventory, some stores may still
> have models in the fall.
>
> "We will no longer have to subsidize these poor or
> negative margins in direct-view TVs, and we're making the
> transition to digital TV faster," said Bob Perry,
> director of marketing for the Norcross, Ga.-based
> company.
>
> Mitsubishi holds just a 3% share of the U.S. TV market,
> selling high-quality, premium-priced sets through 1,000
> dealers. However, it is the top seller of projection
> units, the most lucrative and fastest-growing niche of
> the TV business, representing 917,000 of the 24.5 million
> sets sold in the U.S. last year.
>
> Mitsubishi executives, along with many in the TV
> business, believe that the ultra-clear digital
> transmissions that are just beginning from broadcasters
> are best experienced on larger screens. The company this
> summer will begin selling a 73-inch rear-projection TV
> that displays high-definition digital signals at a price
> expected to be between $8,000 and $11,000. Its
> top-of-the-line 80-inch rear-projection analog TV now
> costs $9,000.
>
> In addition, Mitsubishi is betting that plasma
> technology-based flat TVs, just a few inches thick, will
> succeed small direct-view TVs when costs fall. It just
> started selling a $10,000, 40-inch flat TV in Los Angeles
> and will roll out the product, along with a 46-inch
> version, nationally later this year.
>
> Mitsubishi's move surprised dealers, which weren't
> expecting such a significant change so early in the move
> to digital products. Mitsubishi TVs account for 60% of
> the sales at Weathers TV & Appliance in Edmond, Okla.,
> and "a fair portion" of those are direct-view units, said
> owner Scott Weathers. He has ordered Sony and Hitachi
> direct-view sets to replace his supply of Mitsubishi
> units. "It certainly was disappointing, but I don't think
> I fault them, given the quality of their projection
> systems," said Mr. Weathers.
>
> To help dealers cope, Mitsubishi's Mr. Perry said the
> company modified its schedule of financing promotions to
> drive sales through the next few months, particularly
> before the Winter Olympics next month and the World Cup
> soccer tournament in June.
>
> The company will lay off about 300 people from a
> manufacturing plant in Braselton, Ga., when direct-view
> TV production halts. It will continue producing wireless
> phones at the facility. Meanwhile, Mitsubishi is studying
> an expansion of its projection TV plant in Mexicali,
> Mexico.
> |
