Big Losses + Falling Market Share..A Normal Day At The Office For Sony

Written by David Richards     14/05/2014 | 11:09 | Category: INDUSTRY

They have been promising for years to deliver a profit and tonight Sony will do what they are getting good at by delivering yet another loss.

Big Losses + Falling Market Share..A Normal Day At The Office For Sony
What is becoming a familiar pattern at Sony raises the question of whether this Company is heading to the same place as Nokia and Blackberry.  

Tonight we will gear a new spin on what is becoming a familiar theme.

Two years ago new CEO Kazuo Hirai started promising changes, he said that a turnaround was near, new products were in the pipeline and that the 25,000+ employees including 50+ in Australia would contribute to a turnaround that hasn't eventuated because consumers in their millions have turned off the brand fort products from Apple, Samsung and LG. 

Hirai, has promised to rebuild the company's troubled electronics arm around three pillars: games, imaging technology and mobile devices.

Carl Rose the former CEO of Sony Australia who was axed last year is now initiating major changes at Harvey Norman and a large number of  Australian staff axed by the Japanese Company are still looking for jobs. 

One senior manager axed in the latest round of sackings said "Sony Australia is controlled by Singapore based staff who do not have a clue about the Australian market. All they want to do is initiate cuts. The brand has lost its soul and they aren't going to get it back". 

The Wall Street Journal claims that ratings firms have downgraded Sony's debt to junk status. They claim that long time Sony watchers fear Mr. Hirai is more focused on casting off its failures than on finding the hit product that could restore its reputation as one of the most innovative companies of the past century.

"Mr. Hirai delivers outward messages that are positive. But there is still the image that products that don't make money are dumped, while there is no longer-term vision for what kind of a new lifestyle Sony wants to create," said Shingo Tamura, a former engineer who left Sony in 2006.

Sony's new game system, the PlayStation 4, is performing well. Through early April, Sony had sold more than seven million PS4 consoles in its first five months.

Sony also sees promise in its high-definition portable music players, which it is selling under the Walkman name, as well as 4K television sets that offer improved picture quality. The only problem is that retailers in Australia are now ranging other manufacturer's brands ahead of Sony, this is very evident when you visit The Good Guys or JB Hi Fi where displays from Samsung and LG get pride of place ahead of Sony. In some cases Chinese brands from the likes of Hisense are given more floor space than Sony in the TV category. 
 
The problem is that so far, none of the growth areas seem capable of transforming Sony's bottom line. The 4K TVs, for example, make up less than 10% of global TV sales, and it is hard for niche products to move the needle at a company with roughly $75 billion in annual revenue.

Two weeks ago, Sony forecast a loss of $1.3 billion for the fiscal year that ended in March-a sharp swing from the profit of $300M that it had predicted earlier. 

Some analysts say Sony should follow in Panasonic's path and get out of TV sets and other commodity consumer goods dominated by China and South Korea. Others say the secret is to marry Sony's hardware expertise with new software and services, such as a cloud-based television service Sony plans in the U.S. this year.