Television digest with electronic reports (Jan-Dec 1956)

with Electronics Reports WYATT BUILDING y WASHINGTON 5, D C. • TELEPHONE STERLING 3-1755 Trade Report November 17, 1956 TV's FUTURE-SHAKE-OUT, THEN STABILITY: Conditions in TV manufacturing are going to get worse before they get better — but they will get better. That observation, in effect, was expressed this week by Philco pres. James M. Skinner Jr. and Sylvania chairman-pres . Don G. Mitchell, as trade continued to reverberate from discontinuance of Crosley & Bendix home appliance divs., followed this week by formal announcement of Philco 's purchase of Bendix home laundry equipment business for undisclosed price (but understood to be around |6, 000, 000, with inventory adjustment). Skinner spoke to newsmen at Philco distributor convention in Chicago Nov. 16, called to introduce new Bendix-brand laundry line. Though bulk of his comment concerned laundry equipment, Skinner's remarks on TV's future were no less important. "TV is going through a rough period now and, frankly, I don't see much prospect of improvement until the second quarter of 1957 at the earliest," he said. He remarked that color could give TV market big lift but doubted that it would be much of a factor until 1958, more likely 1959. Skinner also expressed concern about high TV inventories. Though he cited no figures, it's reliably reported that inventories rose again in Oct. — this time to estimated total of 2,600,000 at all levels as of Nov. 1, highest in TV history. * * * * Mitchell spoke to Electrical Associates Inc, in N.Y. Nov. 15, said that competition in TV-radio-appliances is "more intense, more diversified and more imaginative than ever before, and a great deal more costly — and it will continue to be so for a long time." But he said that current "shake-down" period will eventually give way to period of "reasonable stability," pointed out that auto industry also went through attrition periods at critical points in its history. "Special deals, big discounts, trade-ins and special promotions" characterize current TV market, he said. Distribution is key to survival, he said, adding that "without proper distribution, you have nothing." And adequate capitalization is most important requirement for distribution today, far more important than whether independent distributor or factory branch is used, he said. "Shoestring distribution ventures in TV-radio-appliances cannot and will not be successful," he declared. * * * * Philco 's purchase of Bendix included all Bendix laundry trademarks, patents, tools and dies, foreign licenses and current inventories. Formal transfer will be effective Nov. 30. Also announced was a separate agreement whereby Bendix laundry equipment and Philco electric ranges will be manufactured to Philco specifications in Avco plant in Nashville. This arrangement will augment Philco 's laundry equipment manufacturing operations at Dexter plant in Fairfield, la. Agreement also specifies that Philco will service all Crosley products, including TV-radio-phonos. Philco thus will market 5 brands of laundry equipment through its distributors and dealers — Philco brand, Dexter and Bendix. Philco distributors will start to liquidate old Bendix line Dec. 1; Philco itself will not introduce new laundry line in Jan. as usual, but will modify present line. The enormous changes that Philco has undergone this year in effort to improve its market position are underscored by Bendix deal. In 1956 alone, Philco has named a new president, reorganized its, executives, moved into factory service, adopted an automated production line, settled an anti-trust suit on distribution franchises, changed ad agencies, signed a broad-scale retailing agreement with Firestone stores and bought a major laundry equipment manufacturer. And, as a final fillip, this week it announced it's offering its first tape recorders (at $200 & $210) to distributors. Philco is not making the tape recorders, but company refused to reveal who is. Philco isn't through with changes, by a long shot. "This is a 'new look' at 11