|Sony and Konka Play TV Games|
|Key Words||Market, Competition, Price, Profit, Costs, Competition, Quality|
Konka, a Chinese manufacturer of television sets, has 25 percent of the Chinese market. Due to slower growth in China and fierce competition, it is beginning to sell its products in the U.S. It believes that it can compete on the basis of selling high-definition televisions (HDTVs) at a low price. It has made inroads in other markets through its low price and by giving retailers a higher profit margin. Konka expects to introduce a 32-inch screen HDTV, priced at $3,000, later in 1999-competing brands sell for $7,000 or $8,000. Knoka's costs are only about $2,000, compared to $12,000 for competing manufacturers, because it makes the HDTVs in China. It plans to open a plant in Mexico where labor is also cheap.
However, it faces stiff competition from established producers such as Sony, which has a higher-quality product. Also, other producers are planning to reduce their prices. Hitachi is already selling an HDTV set for $2,999, and RCA and Panasonic are expected to follow.
(Updated May 1, 1999)
|Source||Sharon R. King, "A High-Definition Gambit: Chinese Test U.S. Market With Cheaper HDTV Sets", The New York Times, April 1, 1999.|
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