One has to seriously question why Sony sees itself as a player in the consumer electronics market after yet another massive loss.
Writing that Sony has made another loss when it comes to reporting their results that has become so predictable that even the analysts are labelling the Company as “junk status”.
Major rating agencies Fitch and Moody’s have downgraded the company to “junk” status. Standard & Poor’s has warned it will soon follow suite.
On Friday, Sony reported a second quarter net loss of $1.2 billion, and the company confirmed it’s on track to lose a staggering $2.1 billion this fiscal year.
In Australia the Company head office at North Ryde is up for lease as the Company downsizes.
Two years ago the Japanese Company spent hundreds of thousands upgrading the front entrance.
The only bright spot in Sony’s future appears to be the PlayStation 4.
Sales came in at $17.4 billion, an increase of 7.2 percent due primarily due to the contribution of the PlayStation 4 which continues to see strong sales, and outsell Microsoft’s Xbox One.
The massive operating loss of $1.6 Billion was attributed to the company’s mobile phone division which last year was being heralded as one of the divisions that would save the struggling consumer electronics Company who are wallowing across several CE divisions.
The loss is a massive embarrassment for CEO Kazuo Hirai who since assuming the top job in 2012 has exited the PC market, seen TV sales plummet while slashing thousands of jobs in a bid to rapidly restructure the company.
The problem for Sony is that Company who invented the Walkman is struggling to invent another hot product.
The Sony Walkman revolutionized the way people listen to music, and Sony’s Chromatron and Trinitron lines brought colour television to the masses.
Now engineers are struggling to design any product that delivers profits other than a PlayStation gaming console which has very little in the form of competition other that a Microsoft Xbox.
The designs that the Company are coming up with are being rejected by consumers.
A Sony executive recently demonstrated a credit-card sized electronic device that is designed to replace a wallet full of cash cards used by millions of Japanese consumers.
The device connects to a smartphone, and allows users to buy train tickets or snacks at a convenience store.
Sony is also developing “SmartEyeglass,” a wearable pair of glasses that the company says will act as a second screen for a user’s smart phone and eventually incorporate facial recognition technology.
The glasses are similar to what Google is already selling.
The criticisms of these products are familiar — Alibaba and Apple already have payment apps, and Google Glass already exists.
So the big question for investors who are deserting the Company in droves is where Sony’s next revolutionary product is going to come from.
Analysts say something must be done.
“In high grade products, they still have relatively strong brand recognition in the Japanese market. But globally, unfortunately, no,” said Makiko Yoshimura, an electronics analyst with Standard and Poor’s. “It’s very tough to maintain competitiveness of technology. It’s a very tough challenge.”
A walk through Toyko’s world famous Akihabara electronics district reveals the difficulty of the task facing Sony.
Hirroki Ueno, a young salaryman, holds an iPad. “Sony doesn’t seem to be making new products like they used to,” Ueno says. “It seems like they haven’t done much in the last 10 years.”