Sony and Samsung enforcing minimum pricing on TVs

May 23, 2012
11

Cheap televisions may be great for the consumer, but it seems like some companies are fed up of the low prices. The Wall Street Journal reports that Sony and Samsung have both begun to set minimum pricing on their TVs to protect profit margins. Retailers will be prevented from offering the TVs below the prices that the companies have set in an effort to avoid steep discounts.

It’s a risky move, though: both companies 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. The companies do have a legal right to do so, however, with the Supreme Court ruling that retailers must abide by minimum pricing.

The policy works quite well for Apple, with third-party retailers having to adhere to strict pricing, only offering discounts if Cupertino deems it necessary (ahead of a refresh, perhaps). Sony’s motivation is clear, recently reporting a net loss of $5.7 billion in 2011. Samsung, meanwhile, is faring quite well in the market and doesn’t have the same problems, but might want to establish itself as a premium brand through minimum pricing.

[via Gizmodo]


Must Read Bits & Bytes