Sony Continues to Lag (SNE, ERIC, NOK, GOOG, SSNLF, PC, TOSBF)

Given the commodification of the TV business, Sony had better hope so. New research from NPD Group Inc. reports that half the TVs sold in the US now come from two Korean makers — Samsung Electronics (OTC: SSNLF), with 37% of the market, and LG Electronics, with 13%. Sony and Panasonic (NYSE: PC) each claim 9% and Toshiba Corp. (OTC: TOSBF) gets 7%.

Samsung and LG captured 36% of the flat-screen TV market, and 71% of the 3D TV market. Sony, which had 28% of the 3D TV market in the first quarter of 2011, posted market share of just 12% in the third quarter.

Reuters reports that Sony is considering scrapping its LCD TV joint venture with Samsung as the Japanese company seeks to lower its production costs as it tries to keep pace with rapidly declining sales. The two companies cut $555 million in investment in the joint venture last April, as Samsung decided to focus on newer technology and Sony tried to cut its losses in the TV business.

If the acquisition of Ericsson’s share of the smartphone joint venture is the final piece of Sony’s strategic plan, where does that leave the company’s TV business? Unless Sony can establish some kind of technology leadership (remember Trinitron?) that uniquely combines a TV monitor with the company’s other mobile and handheld devices — and if Sony can’t reduce its costs of making TVs — then what’s the point of the company continuing to flounder in the TV market as well as the smartphone and handheld markets?

There is little reason to believe that Sony’s management has a clue about how to capture a decent piece of the smartphone market. The company has piddled away its technology and brand leadership by trailing far behind its competitors in nearly every market it plays in. The company’s game devices have needed a tune-up for a long time, the introduction of a tablet device was a disaster, and there’s every likelihood that Sony Pictures will have to be sold to help the company boost its share price. At this point, Sony’s lagging position in TV sales only indicates that the company is in worse shape than ever.

Sony’s shares are trading down more than -5% in the first hour of trading this morning, at $21.21, in a 52-week range of $18.10-$36.97.

Paul Ausick