"A billion here, a billion there -- pretty soon you're talking real money."
If that's true, then what do you call Honeywell's
Last year, Honeywell recorded sales of $31.4 billion, netting 6.6% of that sum as profit. For its part, Soyo Group, which trades over the counter as SOYO.OB, had just $48.9 million in sales and netted 2.4% on them. It's hard to conceive of a bigger mismatch between business partners.
Just as hard to conceive: Why Honeywell -- or anyone, for that matter -- would want to enter the cutthroat LCD TV game. When you consider that companies from AU Optronics
You (don't) gotta play to win
Except for one thing: Honeywell appears to realize that it's a sucker's bet, and has worked out a way to dip its toe in the consumer electronics market without risking taking a bath. According to news reports on the collaboration, Honeywell won't actually be making the TVs. Rather, it will let Soyo do all the work of manufacturing and distributing the sets. Honeywell's role will be simply to permit Soyo to slap "Honeywell" name tags on the results, and cash the royalty checks.
Admittedly, Honeywell will need to keep a close eye on the TVs produced under its brand name. It wouldn't do to let shoddy merchandise slip through and sully the firm's reputation for quality -- that could easily do more than $3.84 million in damage to the firm's brand and goodwill. But with Soyo promising that it will use Honeywell's brand only on its "top models," that risk should be mitigated.
In which case, while $3.84 million still may not be "real money," it could well be "free money."
For more on the LCD TV industry, read: