U.S. CE Executives Brace For Aftereffects

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CE manufacturers, retailers and distributors contacted by TWICE have not yet seen shortages in key product lines due to the earthquake disaster in Japan, but are unsure about what the long-term consequences will be.

Many are unsure if possible component shortages will impact supplies of CE finished goods in the next month or so and, if that happens, whether higher costs for components may result in higher retail price tags.

Tim Baxter, Samsung Electronics America president, told TWICE during a press event, held here last Wednesday, “We are not anticipating any impact of any significance, but I think there is still work being done. We source components for a number of categories … but we are confident there will be no short-term implications on us.” Colleague John Revie, Samsung Electronics America home entertainment products senior VP, added, “I don’t anticipate any [component] shortages for us. But I think we will know better in about a week or so.”

Gerald Satoren, senior VP of CE business development, DSI Systems, said near-term supplies of TV and home audio brands the distributor carries — Toshiba, LG, Mitsubishi, Sharp, Sony, Onkyo, Pioneer and Yamaha — will not be impacted, “with no long-term problems expected.” But he added, “In my opinion, the jury is still out on how parts availability will ultimately impact final assembly plants for these categories.”

As for price increases due to shortages, Satoren said, “I have been selling TVs for a very long time, and I have never once seen the laws of supply and demand apply to TV pricing. And while it would be nice, I don’t expect it now.”

Daniel Pidgeon, chief financial officer of Starpower, emailed TWICE last Tuesday, saying the closings of facilities in Japan for flash memory and Blu-ray components “will affect CE in a profoundly negative way. Short term, fewer chips on the market will mean dramatic shortages in Apple products that rely heavily on flash memory, along with Blu-ray players and gaming devices.”

He added, “In some respects, it will stabilize the dramatic and unnecessary discounting along these product lines. Conversely, beyond the obvious, creating price and supply interruptions will have a negative consequence on an industry that is already experiencing a shaky recovery. Consumers do not need another reason to put off purchases right now.”

Richard Glikes, executive director of Home Technology Specialists of America, commented that in terms of pricing, “I’d love to see everything go up. We are tired of having to sell 15 percent more products each year to make up for the declining prices. We have not heard of any shortages in the products we carry.”

Mike Decker, electronics senior VP, Nationwide Marketing Group, said Japan’s damaged infrastructure will cause “a serious supply-chain issue for factories who provide parts to our suppliers which will create an inventory shortage for our dealers. However, to mirror the comments made by many of my colleagues in the industry, we are confident that Japan will fully recover from these terrible events and will soon be providing the superior electronics products we have all come to expect.”

Jeannette Howe, executive director of Nationwide’s Specialty Electronics division, said most Japanese suppliers she has been in touch with “appear to be fine” because many are located on Japan’s west coast, away from the disaster. But “the rolling blackouts will also slow production for some healthy manufacturers. And we also don’t fully know what the effects will be on Japanese ports, rail systems and other transportation.”

Abt Electronics said in a prepared statement that it has not been notified of any specific shortages or delays but “we anticipate delays of products from several manufacturers including Sony, Alpine and Toshiba.” Abt said it has good inventory in its warehouse “from manufacturers like Sony. We are filling most orders the day they are placed and no immediate lack of availability is in sight.”

In a statement to TWICE, Newegg said that in non-IT categories, the retailer has “received assurances from most of our CE vendors in Japan that the situation as it stands will have very little or no impact” on Newegg orders, but the retailer said certain IT categories are “areas of concern.” The retailer expects to have a clearer picture of these potential shortages within the next few days.

– Additional reporting by Alan Wolf and Greg Tarr


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