Published On: May 14, 2009

First Annual Loss for Sony in 14 Years

Published On: May 14, 2009

First Annual Loss for Sony in 14 Years

There is good news and bad news for the Sony Corporation today. The good news is that financially, the company is in better shape than expected. The bad news is that for the first time in almost a decade and a half, Sony has posted annual losses.

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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.

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