Sony Launch Expensive Tablets After Shocker $14K Profit Result

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Sony MD Carl Rose hit the nail on the head yesterday when he said “it’s not going too far to say it’s been terrible year for Sony” with his latest financial results revealing that Sony Australia only managed a $14K profit on revenues of $703 Million, down on the$725M reported last year.


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Sony’s S Tablet

Hit by heavy discounting and a lack of innovative products Rose has tried to wrap up the poor performance of the local Sony subsidiary by launching two new tablets, including a 9.4-inch Android Honeycomb wedge-like Tablet S device that runs Android 3.1.

But like a lot of Sony products the devices are pricey at $579 for a 16GB version and $689 for a 32GB version. The US prices of the same tablets are $499 and $599 respectively.

Sony said that a 3G model will be launched in 2012.

In 2010 Rose reported a $9M loss on revenues of $725M, since then he has slashed staff, cut costs and has also moved his once premium brand into discount stores like Woolworths and BigW, in an effort to shift volume sales of his Bravia TVs.

He has also seen the closure by retail partner Bing Lee of the Chatswood Sony Central Store, due to falling demand for Sony products. Bing Lee is continuing to operate the Drummoyne Sony Central Store.
 
At a press event in Sydney yesterday where several new Sony products were launched Rose told journalists that  “What I believe you’ll see for yourself here today is that no matter what gets thrown at us, the innovative and pioneering spirit of Sony will not be broken”.

Currently Sony is being out manoeuvred by brands like Samsung, Google and Apple, as well as brands like LG and Panasonic in the digital camera market. Their failure to deliver innovative products and promote their 3D TVs and cameras are having an impact on Sony’s bottom line say analysts.

The wedge-like Tablet S will go on sale locally at the end of October but will be available for pre-order from the end of September.

In an interview with Fairfax Media Sony Australia managing director Carl Rose defended the price premium compared to US customers, pointing to Australia being a smaller market and other factors like higher logistics costs, taxes and staff wages.

He said he believed the unique features of the Tablet S justified it being priced on a par with the iPad, despite analysts’ concerns.

“I feel that pricing something below an iPad is almost saying we’re going to play the All Blacks but we want them to have 14 men … you’re sort of accepting failure from the start. We think we’ve got a great proposition, we think it’s got value for consumers, people will judge us versus iPad.”

 

Like the Toshiba tablet, the Sony tablets also include extra features like USB ports, PlayStation gaming and can link into Sony’s music and video streaming services.
 
Under the bonnet the Sony device has a 9.4-inch display, an Nvidia Tegra 2 chip and Wi Fi /3G connectivity.


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Another tablet launched by Sony Australia is the pocket sized Tablet P which has 4GB of storage space, built-in Wi-Fi, 3G connectivity and an Nvidia Tegra 2 processor. The Android 3.2 device measures 79 x 180 x 26mm and weighs 327 grams.

Both models come with a 5MP rear camera, a VGA front camera, USB 2.0 port and a SD card slot. And as one would expect they both have accelerometers, gyro sensors, a digital compass and an ambient light sensor.

Forrester analyst Sarah Rotman Epps said that the pricing of the Sony devices “raises a red flag”. “We’ve been down this road before: Motorola and HP both priced their devices on par with the iPad, and both were unable to sell their devices in volume until they lowered the price significantly,” she told the SMH.

Telsyte analyst Foad Fadaghi said Sony was entering a crowded market and would “have their work cut out for them” but acknowledged the company had “the advantage of different form factors, strong consumer brand and ability to bundle with other Sony products.”

Telsyte believes that “android manufacturers need to significantly undercut iPad pricing to attract a strong following,” he said.

“We estimate that Sony will have around 1 per cent market share by the end of this year. This is mainly due to being late to market and potentially using an unproven premium pricing strategy.”

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