Sony's U.S. gadget demand good despite rising costs

By Eric Auchard

SAN FRANCISCO (Reuters) - Sony Corp (6758.T) is seeing little or no sign of softer demand among U.S. consumers for its range of digital TVs, cameras and computer goods despite a weakening economy, a top regional executive said on Tuesday.

But Sony is having to manage pressures on margins that are coming both from spiraling costs for energy and raw materials used in high-tech gadgets and from pricing overseas product costs into weaker dollars, the U.S. official said.

"That's the problem," Stan Glasgow, president and chief of operating officer of Sony Electronics told a group of reporters in San Francisco, referring to profit margin pressures.

Glasgow said the U.S. business is doing everything it can to boost the mix of component procurement and operations it bills in dollar terms instead of other currencies. These include efforts to wring out energy savings from tighter distribution lines and simpler packaging.

Everything, that is, short of increasing U.S. plant production at sites like its Pittsburgh TV plant, he said, as longer-term operational changes were not appropriate to salve a temporary exchange rate benefit.

Sony has developed its M-series line of electronics in Mexico using lower cost components than from Japan, he said, and are aimed at consumers who might not buy its high-end goods, providing a likely avenue for more cost savings.

Sony is enjoying a strong secular wave of growth in demand for digital TVs and related accessories, including Blu-ray high-definition video players, where it is the overwhelming U.S. market leader, and Glasgow sees no let-up.

"We are not seeing clear signs of softness," Glasgow said. "In the high end, it is hard to keep up with the full demand," he said of demand for its pricier flat-panel TV models.