First Annual Loss for Sony in 14 Years

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Sony reported their first annual loss in 14 years today; however the company beat their estimate as to how deep the loss would be. For the past year or so Sony has been slashing jobs, offering early retirements and closing factories as it deals with numerous pressing business issues. Nintendo has stolen precious market share with its Wii game machine over Sony's highly profitable Playstation 3. Apple's iPhone, despite only working on America's weakest network in AT&T, is dominant over any Sony phone currently on the marketplace today. While Blu-ray sales are strong, low-cost players like Vizio and Korean super-company Samsung, have eaten up much of Sony's dominance in the television market.

Sony is not alone in its troubles and unlike many American companies - for instance General Motors - Sony's products are still top-notch when you look at them across the board. Unlike other AV companies in the specialty side of the business, Sony has upper echelon engineers that can out-design and out-think any other company when it comes to hot new consumer electronics. If Sony wants to, they can build nearly any product better and often cheaper than the competition. This was proven by the Qualia project, which Sony built as reference products to lead the Sony line. Qualia products like the 004 projector, led a game-changing product line that addressed both performance and affordability. That was pure Sony. Why they stopped with Qualia I don't think I will ever understand.

Sony's problems are more market driven than product driven. Imagine a world where everyone's home isn't worth 40 percent of what it used to be 18 months ago. Couple that with 6.5 percent unemployment versus 8.5 percent, and watch Sony bounce back - especially if they market their way out of their hole. Low cost players sell on one thing only - price. Sony means more to companies than price. Sony means quality, innovation, ease of use and future-minded technologies and consumers know it. Sony simply needs to get back to that message, and they will be fine.

  • Comment on this article

  • By phil

Sony is responsible for his own demise.
Here are the reasons:
1) taking production to China killed the quality control for the products...product failure was
over 30% when Sony went from Japanese workers to Chinese workers.
2) Sony changed name every 6 months from a great selling name Trinitron to 3 or 4 other
made up names in no ones language. ...confusing the customer.
3) They closed US mfg in Rancho Bernardo for television moving it to Mexico and all kinds
of petty things went wrong including the on-off button
4)The television design is user unfriendly....especially for the older buyers (the ones with the $$)
The hide the power switch...insisted all controls be menu based. I saw older buyers say...forget
it, its too complicated for us.
5) They abandon quality surround sound and components in favor a a 100 watt Receiver for
$149.00 that was crap. How much profit can there be in a $149 product?????????
6) The abandon brand building commercials that they did in early in the decade. Remember the older guy who goes to Russia and buys passage on a Russian Rocket...and they said, when your grand children ask where the money went show them the video?
7) They sold their products to Walmart with all the low priced leaders like RCA et al/.
This shows that just b/c you are a high paid executive in a global firm does not mean
you have good judgment....based on results...they have horrible judgement.

  • By kenneth cascio

And don't forget the SACD fiasco.

  • By George Pecar Jr.

Hey Jerry,
Interesting piece. Seeing Sony posting its first loss in fourteen years illustrates the struggle the world economy is facing. It's a painful reminder of what many of us are dealing with in these complicated times.
If I could make one request? Could you please save your digs on the US automotive industry?--"unlike many American companies - for instance General Motors - Sony's products are still top-notch".
Some Sony products are top-notch. Some are garbage. The same can be said for GM, and others. The 'autos' have taken enough abuse, some deserved, some not. Yes I am from the Detroit area. No I'm not some Union thug. I'm sick while I watch an industry that helped create the middle class, crumble. This is twice as nauseating, when I hear folks who likely drive foreign cars from California, trash companies that they really know little about. These are real people, and their families, being affected by this. Can we keep the discussion centered on our industry, and leave the pseudo-eco-political speak to Clear Channel?

I wondered as well, why they stopped Qualia. I wanted to get my hands on those $2500.00 headphones!!As far as their loss, no one is immune.

  • By brands

Sony reported their first annual loss in 14 years today, however the company beat their estimate as to how deep the loss would be.

Should be: Sony reported their first annual loss in 14 years today. The company however, beat their.........

Sony is not alone in its troubles and unlike many American companies - for instance General Motors - Sony's products are still top-notch

Should be: Sony is not alone in it's troubles and unlike many American companies, General Motors for instance, their products are..........

You're a lousy writer Jerry.

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