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U.S. CE Executives Brace For Aftereffects

NEW YORK –

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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