Sony see's a 2.9 Billion dollar Loss!

GizmoDVD · 02-04-2012, 05:12 PM

http://news.yahoo.com/sony-disappoin...061843906.html

Quote:

TOKYO (Reuters) - Ailing Japanese electronics giant Sony Corp warned it was heading for a bigger-than-expected $2.9 billion annual loss, presenting a daunting task for incoming CEO Kazuo Hirai, who vowed to move quickly to turn things around.
Overtaken by more innovative rivals such as Apple Inc and Samsung Electronics over the past decade, Sony posted a $2.1 billion net loss for October-December, normally a strong quarter boosted by year-end holiday sales, as it battled a strong yen, flooding in Thailand that ruptured supply chains, and a weak economy.
It also took a one-off charge for exiting a flat panel joint venture with Samsung, and said sales dropped 17 percent to 1.82 trillion yen.
The forecast for a 220 billion yen ($2.9 billion) net loss for the year to March, Sony's fourth straight year of red ink, was close to double what the market had expected, and revealed the task ahead for Hirai, who replaces Howard Stringer as CEO in April.
Hirai, a 51-year old Sony veteran known for reviving the PlayStation gaming operations through aggressive cost-cutting, said he would not hesitate to scale back or withdraw from businesses if they were not competitive.
"I have a very strong sense of crisis about the environment surrounding us," Hirai told a news conference. "We cannot be afraid to make painful choices for the future of Sony. Our rivals and the operating environment won't wait for us."
There is unlikely to be a honeymoon period for Hirai, who is under immediate pressure to sort out the ailing TV business after it fell behind South Korean rivals such as Samsung in a market where prices are tumbling.
Above all, Hirai will strive to recapture the innovative flair that led Sony to come up with the Walkman personal music-player in the 1980s and the PlayStation in the 1990s, and regain ground lost since then to Apple and Samsung whose iPhones, iPads and Galaxy gadgets are snapped up by consumers.
Some analysts believe Hirai -- 51, tall, urbane and a fluent English speaker -- can rekindle the flame, saying he has a good grasp of the overall business and is likely to know how to break down its silos and integrate its divisions.
Others are less optimistic about his chances.
"It won't be easy for Sony to regain its lost ground under new leadership, as its overall competitiveness has sharply weakened," said Kim Young-Chan, analyst at Shinhan Investment Corp in Seoul.
"It's got structural problems that will take years to fix.
"It's not just Sony, but Japanese IT firms have similar problems. They are failing to innovate and produce industry-leading products in almost every major area - from TVs to displays, tablets and smartphones."
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Sony earnings graphic: http://r.reuters.com/vah46s
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Hisashi Kuroda, general manager of equity investment at Meiji Yasuda Asset Management in Tokyo said Sony had to take tough decisions.
"Unless they do radical reforms, like the ones that would put everything completely upside down, Sony may not be able even to make profits."
PAINFUL DECISIONS
A chief concept in Hirai's strategy hinges on merging Sony's robust roster of entertainment properties - including singers Kelly Clarkson and Michael Jackson, and the "Spider-Man" and "Men in Black" film franchises - with its Vaio, Bravia and other electronics brands, in an effort to boost sales.
He said the TV business would be crucial to this "convergence" strategy, brushing aside suggestions it may need to pull out of the market even with the business set to lose 220-230 billion yen this financial year.
"There's still a chance in home electronics and I don't think Sony should quit TV's, but unfortunately I can imagine the day may come when they will pull the plug on the business," said a former engineer and executive at Sony.
"This is because when you keep making losses and you have no fresh ideas, that becomes the easy choice."
Chief Financial Officer Masaru Kato said Sony aimed to halve losses on flat TVs in the next financial year from April, when as a company it hopes to make an operating profit of about 200 billion yen.
Hirai singled out medical as a potential core business for the future, but he declined to comment on any possible investment in troubled endoscope maker Olympus Corp.
TROUBLED LEGACY
Welsh-born Stringer, a former journalist who ran U.S. broadcaster CBS, was brought in as a rare foreign CEO in Japan to shake things up, but many analysts see his major achievement as cost-cutting.
Sony's shares have lost nearly two-thirds of their value since Stringer, who turns 70 this month, took the helm as CEO and chairman in 2005.
Stringer sold off TV factories in Spain, Slovakia and Mexico and outsourced more than half of its production to other companies, including Hon Hai Precision Industry, the contract electronics maker whose key customer is Apple.
Recently, Sony exited an LCD panel venture with Samsung, enabling it to obtain screens for its TVs more cheaply. It also agreed to buy out Ericsson's half of their smartphone venture for $1.5 billion to shore up its position in a market where Apple and Samsung have become leaders.
Hirai was effectively anointed as Stringer's successor last March when he was promoted to head Sony's consumer products and services businesses, which produce the bulk of Sony's $85 billion in annual sales.
"They've been grooming him for a while," said Dan Ernst, Hudson Square analyst. "I think he will carry on the plan for Sony - as difficult as it is."
The last year has been brutal for many Japanese companies, hit by a strong yen that hurt exports, and two natural disasters - the March earthquake in Japan and the Thai floods.
Stringer said those disasters and the Lehman shock of 2008 had hit Sony hard and masked much of the progress made during his watch.
"If we hadn't reformed Sony as we did, can you imagine where we would be today," Stringer said. "I rest my case."
($1=76.13 yen)

GizmoDVD · 02-04-2012, 05:13 PM

Guess betting the farm on Blu-ray wasn't such a great idea.

Maybe the Vita will be a huge success for them like it is in Japan /sarcasm

Lee Stewart · 02-04-2012, 05:18 PM

Panasonic 2012 Q3: $9 billion loss, Sanyo writedowns, restructuring

http://www.engadget.com/2012/02/03/panasonic-q3-2012/

TowerGrove · 02-04-2012, 09:16 PM

I've been hearing from a market analysis friend of mine that many companies in Japan, not just those in the CE industry have had a hard time last year partly because of the earthquake issues they were having. The building and lumber goods industry havin the opposite positive sales numbers because of the rebuild. Here's hoping Japan and our friends in Thailand get back on their feet soon!

PSound · 02-04-2012, 09:21 PM

Sony have quietly laid off more than a 100 employees in the US, and sadly it is expected the cuts will continue.

Cygnus · 02-05-2012, 11:02 AM

I know hindsite is 20/20... but I wonder how much better position sony would be if they had not bet the farm on BR and instead gotten on board with HD-DVD as that was the more natural evolution of DVD.

GizmoDVD · 02-05-2012, 11:06 AM

Quote:

Originally Posted by Cygnus

I know hindsite is 20/20... but I wonder how much better position sony would be if they had not bet the farm on BR and instead gotten on board with HD-DVD as that was the more natural evolution of DVD.

Might have enjoy more success with the PS3.

But HD DVD would likely be seeing the same amount of issue BD currently is. Though they already had the idea of packing in a DVD back in 2006 and HD DVDs were cheaper to manufacture (and didn't need brand new lines). Players were cheaper...oh...wait.

Cygnus · 02-05-2012, 03:29 PM

Yeah, I prob would have definitely gotten a PS3 over 360 as PS3 was priced so high. Sony would have saved billions in R&D, BR laser, media replication costs, advertising, etc too. That would make an interesting case study as to sony's possible downfall.

I agree that HD-DVD alone prob would not have been that successful either but the HD media format war really hurt both formats.

Quote:

Originally Posted by GizmoDVD

Might have enjoy more success with the PS3.

But HD DVD would likely be seeing the same amount of issue BD currently is. Though they already had the idea of packing in a DVD back in 2006 and HD DVDs were cheaper to manufacture (and didn't need brand new lines). Players were cheaper...oh...wait.

jkkyler · 02-05-2012, 09:01 PM

FYI - Panasonic projects a 9-10 billion dollar loss for this quarter

http://thewall.com/topics/18874-pana...0-billion-loss

Malanthius · 02-09-2012, 08:56 AM

I found the "won't hesitate to cut back" comment interesting. If Bluray peaks or shows negitive growth in the next couple of years? Could we see cuts in that product and Sony focus on digital or streaming products?

GizmoDVD · 02-09-2012, 09:03 AM

Quote:

Originally Posted by Malanthius

I found the "won't hesitate to cut back" comment interesting. If Bluray peaks or shows negitive growth in the next couple of years? Could we see cuts in that product and Sony focus on digital or streaming products?

Sony has already cut into Blu-ray. They rarely release catalog titles and sold off the rights of many times to Image.

Its clear they don't have much faith in Blu-ray.

Malanthius · 02-09-2012, 09:05 AM

Quote:

Originally Posted by Cygnus

I know hindsite is 20/20... but I wonder how much better position sony would be if they had not bet the farm on BR and instead gotten on board with HD-DVD as that was the more natural evolution of DVD.

I agree. I've always thought HDDVD was like you said. A more natural progression. The Bluray name alone was confusing for consumers. Interesting thoughts. I think one could make a good argument that things might have been better for Sony if they went with HDDVD. As it is HDDVD was totally good enough to provide a HD picture just as good as Bluray. Like the PS3. Bluray was over engineered.

**bruceames** · 02-09-2012, 09:20 AM

Quote:

Originally Posted by GizmoDVD

Sony has already cut into Blu-ray. They rarely release catalog titles and sold off the rights of many times to Image.

Its clear they don't have much faith in Blu-ray.

Yes, Fox and Sony are farming out their catalog distribution to Image and Anchor Bay (and perhaps another small label or two).

That, and with catalog sales so low (if sales weren't so low, we would not be seeing such price erosion reminiscent of DVD in 2007-2008, a full 10 years after launch), means that there will be very little if any work done on these movies before putting them out on Blu-ray. It's not worth the investment except for tent poles.

Kosty · 02-09-2012, 09:40 AM

Quote:

Originally Posted by Malanthius

I found the "won't hesitate to cut back" comment interesting. If Bluray peaks or shows negitive growth in the next couple of years? Could we see cuts in that product and Sony focus on digital or streaming products?

Blu-ray releases for catalog titles and for new releases will be done year after year until they no longer make money which will be some years to go in the unknown future.

bombsnizzle · 02-09-2012, 10:02 AM

Quote:

Originally Posted by Malanthius

I agree. I've always thought HDDVD was like you said. A more natural progression. The Bluray name alone was confusing for consumers. Interesting thoughts. I think one could make a good argument that things might have been better for Sony if they went with HDDVD. As it is HDDVD was totally good enough to provide a HD picture just as good as Bluray. Like the PS3. Bluray was over engineered.

Besides this being factually wrong, it is personally biased.

I've had a PS3 since 2007 and it has been an awesome piece of electronics.

Without ever having to buy another thing for it I have only gotten more and more use and functionality out of it as time has progressed. DVD, bluray, Netflix, Vudu...the list goes on and on.

On the contrary I have gone through 3 cellphones (including 1 iPhone and 1 Android) since I bought the PS3. Maybe they were under engineered. The PS3 still holds its own. 5 years later. If I had a 5 year old cell phone it would look ancient right now.

02-05-2012, 11:02 AM	#6
Cygnus The Bringer of Balance Join Date: Dec 2004 Posts: 11,164	I know hindsite is 20/20... but I wonder how much better position sony would be if they had not bet the farm on BR and instead gotten on board with HD-DVD as that was the more natural evolution of DVD. __________________ Panasonic P55 ST30 Kenwood VR-616 Comcast DCT6412 III XBox 360 GamerTag Sec0nd2N0n3

02-05-2012, 09:01 PM	#9
jkkyler I bleed for HD Join Date: Nov 2007 Location: Ohio Age: 42 Posts: 4,318	FYI - Panasonic projects a 9-10 billion dollar loss for this quarter http://thewall.com/topics/18874-pana...0-billion-loss __________________ HT- Panasonic TH-50PZ800U 1080p plasma, Panasonic PT-AX200u LCD projector, Elite Vmax Electric 100' screen, Onkyo TX-NR905 AVR, Paradigm Titan Monitor v5 fronts, Paradigm CC-190 v6 center, Paradigm Atom Monitors v5 surrounds(x4), HSU research VTF-2 sub, xbox360+hd-dvd player ,Sony BDP-S550 blu-ray, D*tv H21 HD-DVR Bedroom: Insignia NS-lcd26, Samsung BDP-1400 blu-ray Den - Vizio 20" 1080p LCD + Samsung BD-p1600 Whether you think you can, or think you can't - You're Right

02-04-2012, 05:13 PM	#2
GizmoDVD High Definition is the definition of life. Join Date: Nov 2011 Posts: 629	Guess betting the farm on Blu-ray wasn't such a great idea. Maybe the Vita will be a huge success for them like it is in Japan /sarcasm

02-04-2012, 05:18 PM	#3
Lee Stewart Muscle Cars Forever! Join Date: Jan 2007 Location: Albuquerque, NM Posts: 33,378	Panasonic 2012 Q3: $9 billion loss, Sanyo writedowns, restructuring http://www.engadget.com/2012/02/03/panasonic-q3-2012/

02-04-2012, 09:16 PM	#4
TowerGrove High Definition is the definition of life. Join Date: Nov 2008 Location: St. Louis, MO USA Posts: 500	I've been hearing from a market analysis friend of mine that many companies in Japan, not just those in the CE industry have had a hard time last year partly because of the earthquake issues they were having. The building and lumber goods industry havin the opposite positive sales numbers because of the rebuild. Here's hoping Japan and our friends in Thailand get back on their feet soon!

02-04-2012, 09:21 PM	#5
PSound High Definition is the definition of life. Join Date: Oct 2011 Posts: 1,732	Sony have quietly laid off more than a 100 employees in the US, and sadly it is expected the cuts will continue.

02-09-2012, 08:56 AM	#10
Malanthius High Definition is the definition of life. Join Date: Nov 2011 Posts: 344	I found the "won't hesitate to cut back" comment interesting. If Bluray peaks or shows negitive growth in the next couple of years? Could we see cuts in that product and Sony focus on digital or streaming products?