With global shipments of flat-screen LCD TVs falling in 2012 for the first time ever, it's not surprising that Japanese consumer electronics giant Panasonic (NASDAQOTH:PCRFY) is questioning whether it should remain in the business.
Panasonic say that it's staying put for the time being, but the toll of falling TV sales claimed one victim: The company's chairman will resign his position ahead of schedule, as he takes responsibility for the company's poor performance. The TV and gadget maker expects to record an $8.1 billion loss for the fiscal year when it reports earnings.
According to the market researchers at NPD DisplaySearch, shipments fell more than 6% last year, dropping from 249 million units, down to 233 million. Some think that may have been the bottom, and note that, in the U.S. at least, buyers tend to replace their sets every seven years. With the current crash having started around 2005, now is about the time for consumers to whip out their wallets again and start laying out some cash for new and bigger screens.
LCD screen maker Corning (NYSE:GLW) has been hurt just like every other industry supplier, but management believes 2013 will be an inflection point driven by an increase in retail sales of LCD televisions and demand for larger screen sizes. It forecasts that the LCD glass retail market in 2013 will rise by mid-to-high single digit rates, from 3.5 billion square feet in 2012.
This might be a lone voice of optimism, though, because Panasonic's main Japanese rival Sony (NYSE:SNE) is still anticipating a bloodletting. Sony's quarterly results indicated that TV sales plunged 25% in the quarter, and the company drastically revised downward the sales guidance it just gave in November. Although a large part of the revision has to do with a lack of anticipated sales for Blu-ray players, annual unit sales for LCD televisions has also been lowered.
For the time being, Panasonic will remain a small-screen player; but never say never. While it would be a last resort for the company to abandon the TV market, the company's president says, "That possibility is not zero."
We may have to look to 2014 before we can change the channel on this industry.
Bright lights, big city
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Corning. The Motley Fool owns shares of Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.