“Automakers aren’t the only ones halting production as inventories pile up. The consumer electronics industry is also coming to grips with rising stockpiles of unsold goods that are likely to result in price pressure and falling profit,” Olga Kharif reports for BusinessWeek.
“Recent evidence of growing inventories came Dec. 15, when SanDisk, a maker of memory cards and storage drives, said it will temporarily stop production at two Japanese plants for two weeks through Jan. 12. After that, the factories will resume work at 70% capacity. SanDisk hopes the cutbacks will help it whittle away at the piles of unsold devices in warehouses and on retailers’ shelves,” Kharif reports.
“PC makers are likely among the casualties… IDC this month cut its forecast for computer unit sales growth to 5% from 13.2%. Desktop and traditional notebook sales at such vendors as Dell and Hewlett-Packard may be especially hard-hit,” Kharif reports.
“Partly as a result of inventory buildup, annual sales of flat-panel TVs will decline for the first time in 2009, to $21.8 billion from $24.4 billion this year, according to researcher iSuppli… The pileup could pressure prices for much of next year, making it difficult for lesser-known brands to survive,” Kharif reports.
Full article here.
[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]
Yes there is a excess of supply, which the industry is dumping as fast as it can so it can reduce supply and raise prices for 2009.
Inflation is coming, because there will be less buyers, the prices will climb higher to make little profit and the more the prices go up the less buyers there will be and prices will go up because of it.
Yes a lot of shake-out in all industries will occur.
Stick with the top brands, and if you want to buy a American vehicle, get a Ford. Ford still has $20 billion and a line of credit for another $10 billion. So they are the best to weather this Great Recession than the other domestic car makers.
Sure their prices will go up even more when their inventory decreases and even more if GM and Cry-sler bites it later this year. They all share the same suppliers.
Apple and HP will remain the chief computer makers, unless we taxpayers bail out Dell and the rest which equates to more taxes taken out of our collective paychecks each week.
Did you know the $700 billion (plus $110 billion in pork) costs every working person in the US $3000 in taxes the next year? (naturally they will stretch it out over a few years)
Now figure in the estimated $140 billion to bail out a bunch of UAW $75 a hour auto-worker crybabies who their counterparts in the automaking south earn a honest $40 a hour.
We Americans have paid too much for our cars because of the UAW, and now because the businesses are failing, have to pay out even more. Socialized anything sucks. Congress sponsored socialized sub-prime housing caused mess, they admitted it. they pushed Freddie and Fannie to accept more sub-prime mortgages and this is the result.
My opinion of course.
YAY!! Cheap plasmas for everyone!
OMA – RIGHT ON
Mr. Old Mac Addict,
To much nonsense in one post. To properly respond to it would take more time and effort than I am currently willing to spend. Nevertheless, I will mention two point here:
A. A fall in supply, when accompanied by a fall in demand, can lead to either a rise, fall or stagnation of prices. This is basic Microeconomics 101. In other words, you might discover that 2009 is imbued with deflationary pressures. Deflation though can be worse than inflation for the economy.
B. The so-called bail-out funds, are not going to be financed by raising taxes. That would defeat the purpose of “jump starting” the economy. You will not be paying out those 3000 dollars or so — your children and grandchildren will be doing that for you…
C. You can hardly accuse the auto industry for being cry babies and failures of management, transparency and fiscal responsibility. When America INC. as a whole has engaged in those very malpractice’s for so long now. The auto industry is a microcosm of America. So stop bitching about it when almost all your fellow citizens have been collectively using up the future to pay for their present. America INC. is in need of a bail out, and it will not come from Washington but from Beijing (after all, their savings have been financing your spendings for many years now…)
D. You live by the sword — you die by the sword…
The business of Government is not Business.
Let the strong survive.
Too bad we couldn’t take that attitude with social programs.
(Had to say that just before Christmas.)
You’re certainly right on the bailout nonsense. Honest Ed needs to buy a clue, because the UAW, GM and Chrysler certainly ARE crybabies because–unlike the most of America, Inc.–they are asking the US taxpayer to bail them out. Oh, and China and Japan are sinking like a couple of UAW concrete galoshes, so they’re not going to be bailing out anyone in the USA. Unless you think the US governent will actually go into default the taxpayer certainly WILL be paying for all the socialized losses that Bush and the Dems have decided to cover.
$199 blue ray!! it’s coming, wait till january. oh yeah baby.
A. A fall in supply, when accompanied by a fall in demand, can lead to either a rise, fall or stagnation of prices.
Because demand is down, there is excess supply. The industry is reducing supply to below the future level of demand, this will mean higher prices.
B. The so-called bail-out funds…You will not be paying out those 3000 dollars or so — your children and grandchildren will be doing that for you…
In inflated dollars naturally, and we will have to incur inflation to do that. So a steady stream of inflationary years to achieve it. To make $3000 appear as it’s 50¢. This is of course if other nations continue to accept our debt, if not then printing of more dollars and sudden hyper-inflation.
C. You can hardly accuse the auto industry for being cry babies and failures of management, transparency and fiscal responsibility.
I’m not accusing the auto-industry, just the overpaid UAW which didn’t allow the Big Three to generate enough profits to weather the bad times.
Did you know the UAW is the largest consumers of Viagra in the world because of their free health care? Wonder what kind of scam is going on there.
Did the UAW chief arrive in a private plane to Washington just like the auto-executives did the first day? I should think so.
D. You live by the sword — you die by the sword…
Whatever you mean by that is unknownst to me.
the UAW, GM and Chrysler certainly ARE crybabies because–unlike the most of America, Inc.–they are asking the US taxpayer to bail them out.
The domestic auto industry has had it’s own problems for years. Overpaid union workers and benefits, even getting 90% of pay when they are NOT WORKING!! It took this post real estate bubble recession to flush the problems to the surface.
When Congress turned more Democrat under the second term of Bush is when we began seeing pressure being placed upon the mortgage giants Freddie Frannie, (which are government sponsored entities by the way) to accept substantial amounts of sub-prime mortgages. Your local bank had a way to dump these sub-prime mortgages off their books via Freddie and Frannie, and the risk was spread to Wall Street via mortgage backed securities to dumb smucks overseas.
The largest recipients of PAC money from Freddie and Fannie were Senator Dodd, Obama and Clinton. (*source Bloomberg.com)
This was a push by Dems to get votes by putting the sub-prime people, even illegal aliens, into their own houses.
Alan Greenspan in 2005 warned multiple times to Congress this is going to cause problems. “Privatizing the profits and socializing the risks” he said.
97% of people are paying their mortgages, 3% people are not. The sub-prime mortgage failure spread over to the prime market and makes more people fail.
So the resulting economic problems and the auto-bailout, bank bailout and so on, is because of the socialistic attempt by Dems in Congress. They then blame Bush, who maxed out his term anyway and could care less, for the economic problems the Dems themselves caused and more Dems get elected.
What needs to be done is to get the automakers to be viable and profitable, or else we are throwing money down a rathole.
@OMA, what a nonsensical, contradictory pile of gibberish. Oversupply leads to inflation? Back to kindergarten with you.
And why even argue about it? People believe what they choose to believe, and in many cases, no amount of proof will ever change their minds.
@applecart
You don’t have access to a bluray player below $199? I work at Future Shop in Canada and could nab you a samsung player for $179 CAD, nevermind exchange…