Honeywell International Inc.
may be best known for its thermostats and aircraft engines, but flat-panel televisions soon will bear the company’s name as well.
Honeywell-branded TVs are expected to go on sale this year under a licensing deal between the Morris Township, N.J., conglomerate and Soyo Group Inc.
a small electronics manufacturer.
The deal marks Honeywell’s first foray into the consumer-electronics sector, although Honeywell has an active brand-licensing program for portable home air filters and other products.
Soyo will design and distribute the liquid-crystal-display TVs and pay Honeywell royalties. In addition, the deal eventually may result in Honeywell-branded computer monitors and displays, although executives of the two companies declined to elaborate.
They wouldn’t release sales forecasts or other financial details, beyond saying that the six-and-a-half-year agreement will provide a minimum of $3.84 million in royalties for Honeywell.
The sum is inconsequential compared with Honeywell’s $31.4 billion in 2006 sales. But company executives are intrigued by the market regardless.
“We’re always looking for opportunities to expand the brand,” said Loria Yeadon, chief executive of Honeywell Intellectual Properties Inc. “We think consumers will appreciate having Honeywell-branded (electronics) because they know that there’s quality” in the name.
Yeadon said she isn’t concerned that the move could be a stretch for the Honeywell brand. The company is well known as a technology innovator, she said, and many of its patents are already used in various consumer devices.
Brand expert Alan Siegel, chairman of strategic branding consultant Siegel + Gale in New York, concurred, noting that the Honeywell brand is in many homes now and has a solid reputation. His firm doesn’t work for Honeywell.
“It’s not an unrealistic brand extension” for Honeywell to go into consumer electronics, Siegel said. “Honeywell already is something of a household name because of its thermostats.”
He said the key for the company will be to ensure that the new products bearing its brand, and the services surrounding them, are of good quality.
Honeywell executives contend they’ll do just that. They said they’ll consult with Soyo on design and also will monitor its sales and advertising.
Soyo, an Ontario, Calif., company with about $40 million in annual sales, is a provider of computer components, such as motherboards and networking equipment. But it has been attempting to break into the LCD television market, and it currently sells TVs under its Soyo and Go Video brand names.
Soyo Chief Executive Ming Chok said the Honeywell-branded TVs will be the company’s top models.
“Our goal is to build a product that will compete with the majors,” he said.
Chok said the Honeywell TVs are expected to be sold in “tier one” retail outlets, although he declined to reveal the precise marketing strategy.
Honeywell shares were trading recently at $46.49, up 58 cents, or 1.3%, from Friday’s close. Soyo shares were trading at 40 cents, down 4 cents, or about 9%.
View more information: https://www.marketwatch.com/story/honeywell-licenses-brand-name-for-flat-panel-televisions