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Hon Hai Precision's plan to slash 60-inch LCD TV prices panned

The plan by Hon Hai Precision Industry and its new ally Sharp to slash the prices of 60-inch LCD TVs met forays from industry players yesterday.

The experts voiced their criticism after it was reported Hon Hai and Sharp are reportedly considering cutting the prices of 60-inch LCD TVs to US$999 each in the United States at the end of the year.

According to reports, Hon Hai and Sharp are expected to first offer the TVs to employees and shareholders at the end of September or the beginning of October, at the time of Mid-Autumn Festival. Then they'll launch the 60-inch TVs in important markets at the end of the year at the discounted price.

It was said that both companies are planning to do this to clean their inventories, and the move met critical remarks from various industry players, including K.Y. Lee, chairman of AU Optronics, a leading panel manufacturer.

“Lowering prices to clean inventories is something that will kill all of us,” the United Evening News quoted him as saying. “With this, we'll be forced to drop the prices of our 32-inch and 40-inch TV inventories as well, and in the end it's the panel manufacturers who will suffer.”

While Hon Hai has vowed it will not do business that loses money, DisplayResearch expert Hsieh Yi-chin noted selling 60-inch TVs at US$999 will incur losses, as the cost of producing a 60-inch panel is about US$700 to US$720, and the cost for assembling a 60-inch TV is about US$1,200.

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