Business, Economics and Jobs

Samsung, Sony curb discounts on TVs amid decreasing demand


Samsung Electronics Co. televisions sit on display at the 2012 International Consumer Electronics Show at the Las Vegas Convention Center January 10, 2012 in Las Vegas, Nevada. The company, along with Sony, is scaling back on its TV discounts in an attempt to curb declining profit margins.


Kevork Djansezian

Samsung and Sony, two of the world's largest television manufacturers, have asked US retailers to cut discounts on their TVs in an attempt to protect profit margins, the Wall Street Journal reported Wednesday

The move comes as demand for televisions declines: TV shipments dropped last year for the first time since 2004, causing record losses for Japanese manufacturers, Bloomberg Businessweek reported.

Sony, the third-largest TV maker in the world, has forecast their ninth consecutive annual loss as a result of selling televisions, according to Bloomberg. Samsung, though not currently struggling, is unveiling new models and technology so that they can charge consumers more, Bloomberg reported. 

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HDTV prices have fallen 15 percent over the last two years, sitting at an average selling price of $545, Apple Insider reported. The companies hope that by enforcing minimum prices at retailers, they can stop the price decline. 

According to Slate, the Supreme Court has ruled that companies are allowed to set a minimum price to advertise their products at, but it isn't clear-cut how much power they have over enforcing those prices. 

Apple uses a very similar strategy of setting rules that restrict the prices at which its' products can be sold, ensuring that the technology company maintains its profit margins, according to Apple Insider. 

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"It’s a risky move, though," wrote SlashGear's Ben Kersey. "Both companies (Samsung and Sony) could potentially reap in a bit more profit as a result, but that’s assuming consumers are happy to pay the higher prices over competitor’s televisions. There’s also the fact that there hasn’t been a huge leap in TV technology recently, with cheap 1080p TVs being good enough for the content on offer." 

Would you pay higher prices for a television? Or is the technology dying out altogether? Let us know what you think in the comments.