Hon Hai Teams Up with Sony to Explore Chinese Market

Hon Hai Group of Taiwan, the world`s largest EMS (electronic manufacturing service) provider, has teamed up with Sony of Japan, a globally leading brand of consumer electronics, to explore China`s LCD (liquid crystal display) TV and TV game console markets

Industry insiders noted that Sony aims to resume its leading position in the global market through the cooperation. The brand has repeatedly adjusted downward its LCD TV shipment projection to only 14 million units for this year, far behind Samsung and LG, both of whom are expected to ship over 20 million units in the year.

Sony has recently enhanced its cooperation with Hon Hai Group to take advantage of latter`s excellent production capability and ample capacity, in a bid to save its souring LCD TV business. For instance, Sony has recently sold 90 percent stake of its TV production plant in Mexico to Hon Hai Group and placed all its orders with the group for LCD TVs for sale in North America.

Furthermore, eyeing huge demand for LCD TVs and TV game consoles in China, Sony decided to work with the group to jointly explore the lucrative market. If the cooperation model, with Hon Hai Group specializing in production and distribution and Sony in branding and promotion, works well in China, the both sides won`t rule out the possibility of duplicating the experience in other markets in the future.

China is expected to become the world`s largest single market for LCD TVs, with scale of which is estimated to reach 23-25 million units this year and further grow to 32-35 million units next year.

Besides, the cooperation is promising for Sony, as Hon Hai Group has planned to pour over NT$10 billion in the next two to three years into operation of over 10,000 outlets for 3C products in China. At present, the group`s reinvested 3C product chain store, Saibo Digital, has owned 40-strong outlets in the country.

Source: CENS