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By Franklin Paul
NEW YORK, March 5 (Reuters) - Sony Corp’s (6758.T) (SNE.N) electronics sales in the United States have been solid in the first two months of the year, despite concerns about the economy, a senior company executive said on Wednesday.
“We have already had a solid January and February,” said Stan Glasgow, president and chief operating officer of Sony Electronics, the Japanese company’s $12 billion U.S. unit. Sales were strong for several lines, including flat-screen televisions and digital still and video cameras, he added, speaking on the sidelines of a briefing with reporters in New York.
“Across the board it was pretty good. I wouldn’t say great, but good,” he said, adding that sales were in line with internal expectations after a record holiday shopping season in which some product lines gained market share.
The resilience of electronics sales counters dour returns for many sectors amid the slowing U.S. economy and a housing slump, an environment that led billionaire investor Warren Buffet to say the U.S. economy is in recession.
Electronics remains a bright spot for Sony, the entertainment conglomerate that is home to everything from Hollywood movies and PlayStation game systems to Vaio PCs. In January, the company posted a small rise in quarterly operating profit and cut its outlook, saying weaker markets were eating into its investments and a firmer yen was hurting overseas sales.
Glasgow attributed the U.S. unit’s resilience to Sony’s status as a premium brand, which draws demand from shoppers with more money to spend on electronics and for whom problems like home foreclosures are not an issue.
“For the industry it might (affect TV sales), but I don’t think it’s going to affect us that much. I’m not sure the subprime people were our main customers,” he said.
TV DEMAND STRONG; NEW BLU-RAY BATTLE
What is more, demand for flat-screen TVs remains high as more and more consumers upgrade to high-definition video systems at home. Sony vies with Samsung Electronics Co Ltd (005930.KS) and Sharp Corp (6753.T) in flat-screen TVs.
“The HD transition may trump the economy,” Glasgow said. “It’s very likely that it’s not going to affect TVs overall that much, because of the HD transition.”
At the briefing, Glasgow said Sony, fresh from the triumph of its Blu-ray movie technology over the rival HD DVD format, said it expects about 5 million Blu-ray high-definition movie players to sell globally this year, primarily in the United States, including models made by other manufacturers.
Toshiba Corp (6502.T) pulled the plug on its HD DVD format last month, leaving the Sony camp free to pursue a home movie market worth up to $24 billion a year.
Sony intends to boost production of stand-alone Blu-ray players this year, but Glasgow acknowledged that consumers may resist replacing their standard DVD players.
“The battle really begins now. We have to convince people of the value of high definition and begin to move people away from DVD,” he said.
He also deflected the notion that Blu-ray’s growth may be slowed by online distribution of movies, insisting the infrastructure for downloading is in its infancy and that consumers still prefer movies on physical discs.
“It takes 25 hours to download an HD movie” he said. “Downloading is going to build over time — it could take 10 years until there is any significant percentage in terms of downloading.
“It is going to happen, but I don’t see it derailing the package format. It’s still something consumers want,” he said.
(Reporting by Franklin Paul, editing by Gerald E. McCormick and John Wallace)
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