News from the digital music player battlefield--
Sony lost a large opportunity against Thomson (those of you keeping score will realize that this is a victory for MS Audio).
Here is an interesting part of the below article:
"Tandy, based in Fort Worth, Texas, considered several other electronics makers for the relationship. In recent months, executives narrowed the selection to Thomson and Sony. They began notifying existing suppliers Monday of the decision to go with Thomson, which is based in Paris."
May 11, 1999
-----------------------------------------------
Tandy Chooses Thomson's RCA
As Brand for Radio Shack Chain
By EVAN RAMSTAD
Staff Reporter of THE WALL STREET JOURNAL
Tandy Corp., ending a 35-year reliance on its house brands Optimus and Realistic, chose Thomson SA's RCA products as the exclusive brand of audio and video goods for its massive Radio Shack chain.
The companies are expected to announce the agreement Thursday, people familiar with the negotiations said. Both companies declined to comment.
As part of the deal, Thomson will help pay for Radio Shack to outfit its 5,000 company-owned stores with a special merchandising area, or store within a store, for RCA TVs, stereos, related equipment and accessories. That process will be completed early next year, though RCA's late this summer.
Radio Shack made similar arrangements with Sprint Corp. for digital wireless phones in 1997 and Compaq Computer Corp. for home computers last year. Tandy executives credit both relationships for helping increase store traffic and sales.
Tandy's latest deal will likely accelerate the financial resurgence of Thomson's multimedia unit, which eked out an operating profit last year for the first time in over a decade. It is also likely to improve perceptions of RCA products.
While RCA is still the top-selling brand of TVs in the U.S., Sony Corp. recently overtook the company in dollar volume. RCA, however, has scored some meaningful innovations this year, becoming one of the first two companies to receive standards certification for a cable modem and the first major electronics maker to roll out a digital music player.
Tandy, based in Fort Worth, Texas, considered several other electronics makers for the relationship. In recent months, executives narrowed the selection to Thomson and Sony. They began notifying existing suppliers Monday of the decision to go with Thomson, which is based in Paris.
Tandy is enjoying one of its strongest years ever, with sales at comparable stores, or those open at least a year, up 14% through April. Tandy's stock has nearly doubled since the start of the year and Monday closed up $3.9375, or 5%, to $83.125, a 52-week high, in New York Stock Exchange composite trading.
However, executives perceive they are missing out on surging demand for some audio-video products, such as digital videodisk players.
Executives had been considering whether to stop producing its Realistic and Optimus brands since 1996, because of rising costs. In addition, as Radio Shack develops in-home installation services and a marketing strategy emphasizing home-connectivity devices, executives believed that weak perceptions of their store brands might impede
sales |
