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Shocking profits behind TV stands and accessories

Across the globe, the major TV producers are on their collective knees. Nope, they’re not searching for a remote control under the sofa, they’re looking for any way to turn a profit – before they go out of business. With companies like Sony experiencing a share price drop that would scare even an Olympic downhill skier, KitGuru heads to China to see where the profits really lie and consider whether al that margin will be enough to save today’s big players.

You only have to plug one of their BluRay players into a TV and try to play a YouTube HD video to see where Sony is running into enormous difficulties. Apple is a pain in the arse when it comes to content control – but even a Flash-player-free iPad seems completely liberated compared to the blank result you get from Sony when it comes to HD on YouTube.

With demand for its TVs plummeting and competition from Samsung et al getting stronger all the time, what future is there for Sony in this market?

One thing is for sure, the profits needed for Sony to survive as a TV manufacturer are unlikely to be in the devices themselves. But where else can you make a serious buck in/around the diminishing number of sets still being sold?

We received an interesting email into the KitGuru HQ email box this afternoon (apparently Xmas means less in the Far East and many are still at their desks). It’s from an OEM (Original Equipment Manufacturer – the people who REALLY make the stuff we buy), promoting its range of TV stand/bracket solutions.

Before we reveal the price that was offered to us for a stand that could take up to a 62″ TV, let’s do a quick bit of research on stands for the Sony Bravia. It’s a cool range of TVs, no doubt. Arguably one of the best on the market, so how much for the wall mounting bracket from Sony?

Seems like a competitive price, but how much do these things cost to make?

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If you want to buy small quantities – without negotiating on price at all – then you can have a wall bracket that has a (near) universal fitting mechanism and built in spirit level for a lot less than you think.

It's possible that Sony now makes more from TV stands than it does from the TVs themselves

Headphones and speakers make a similar amount of margin – and can be sourced from multiple vendors in the Far East. In all of these categories the profits available to ‘brand holders’ like Sony are enormous.

If a random email can offer $4.61 (£2.85), then it’s possible for Sony to drop a stand into someone like Dabs – and sell it for a profit – at something like £9.99 inc vat, but the actual price is more than 11x that amount. .

But the problem is that in order to sell the accessories – you need to have sold the main product first.

While Sony is still king of the mass-market, pro-quality HD video camera and has some interesting projects coming up with Hassleblad at the serious end of the camera market, it is struggling with the bread and butter business of the Bravia et al.

How serious is the struggle?   Well here’s a graph that shows Sony’s share price over the last 2 years.

Problems with the secret installation of root kits and the exploding batteries saga haven't helped, but Sony's real problem is that the brand is lacking in 'cool'. A problem shared by Nokia and Microsoft. Wall brackets are profitable, but dull.

KitGuru says: We can’t imagine Sony failing as a company, but it needs to rapidly rethink its plans and work to evolve into an organisation that can battle effectively in the 21st century. Making money on TV stands is good business – but Sony needs to stand for more if it is to thrive.

Comment below or in the KitGuru forums.

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