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COMMENT: Tomorrow Sony will launch a new product line-up in an effort to recapture lost sales in Australia they are also tipped to slash the price of several products in an effort to remain competitive. The price cuts come as Sony moves to Chinese manufacturers to make their products

But their efforts maybe too late as competitors like Samsung, LG and Panasonic are also lining up an arsenal of new products for the peak Christmas New Year buying period which Sony are going to have to compete with.

Instead of a made in Japan sticker these new products will have a made in China or Taiwan sticker which raises serious questions as to whether the Sony brand is today worth a premium sticker price.

The Japanese Consumer electronics Company who was succesful in the 80’s and early 90’s with the Walkman, CRT TV’s and other consumer products is not succesful anymore. Nobuyuki Idei, the former Sony chairman said recently that Japanese companies need to rejuvenate their management and stop clinging to business practices from two decades ago to become more competitive.

“It’s said a successful person often experiences depression after having success, a state known as creative depression,” Idei, 71, said. “Japan is precisely in such a state of depression, being unable to forget its success in the 80s.”

Right round the world consumers are walking away from purchasing Sony products while in Australia Sony is struggling to hold onto market share in the flat panel TV and digital camera and camcorder markets as well as in the personal audio market where their Walkman has slumped to single digit sales up against the Apple iPod. They are also being beaten in the Blu ray market.

3 years the Sony brand stood for quality, but today in an effort to cut costs the Company is moving to third party manufacturers in China, Taiwan and Malaysia to make their products after global cost cutting has seen Sony factories shut and tens of thousands of employees sacked.

And while LG, Samsung and Panasonic are reporting record sales with Samsung snaring the #1 slot for flat panel TV sales in both Australia and the USA Sony is struggling from massive losses.

In the fast growing camera market Sony has slipped to #5 with the Company also struggling in the Vaio PC and notebook market.

Recently the Company who has a reputation for price gouging Australian consumers on the notion that their brand is worth a premium was forced to launch a cheap low profile made in China PS3 Playstation in an effort to stave off falling game console sales. And while the Company bleeds billions from poor management decisions and a product line-up that has lost its appeal with consumers retailers are starting to question the value of stocking Sony over in demand Samsung products, or a digital camera from the likes of Canon or Nikon.

 For months, Sony’s management has been taking an axe to its operations in Australia and while the Company officially announced 32 layoffs last year ChannelNews has been told that there have been further cuts in 2009 due to falling sales.

Early in January Sony globally announced that it would slash costs, eliminate 16,000 jobs and close 57 factories around the world.

 

Next month Sony is expected to announce another big loss this time in excess of $1.8 billion. This is on top of the US2.32 billion dollar loss the Company announced on May 14th.  Sony also expects global sales to fall 6% in this quarter to $76.8 billion.

Sony has faced hard times since the global recession started. In February, CEO Howard Stringer took over control of Sony’s struggling electronics division, which makes PlayStation games, Bravia televisions and other Sony consumer goods.

Sony is desperately trying to save more than $3.1 billion dollars by selling off factories, revamping its supply chain, which involves moving production to low cost manufacturers such as Foxconn in China.

Right now Sony is struggling make their Playstation video games division and their Bravia TV divisions profitable. To date both these divisions have racked up billions in losses.

The launch by Sony Australia of several new products is critical for the Company and even more important for CEO Carl Rose who since returning from Europe to take up the CEO role has seen Sony market share slides in the Bravia TV, Blu ray, digital camera and camcorder markets as well as the portable music (Walkman) markets.

 

 

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