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Sony on the road to recovery?

by Alistair Lowe on 1 November 2012, 10:02

Tags: Sony (NYSE:SNE)

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Towards the end of the 20th century, Sony was one of the biggest premium brand-names you could find, with its fingers in the electronics and media cookie jars and the money rolling in from these two major industries.

Today, the story isn't quite the same. With firms such as Apple taking the brand spotlight and companies like Samsung providing competitive cost-to-performance production of electronics goods, Sony has found it difficult in a world where cheap electronics and a unification of services are what the public appears to want.

The firm has had its 'One Sony' vision for quite some time in one form or another to unify services and products, however was beaten to the punch in various emerging segments of industry by services such as iTunes and Facebook and, out-priced when it came to hardware markets such as television.

Most recently, new CEO, Kazuo Hirai, has attempted to reinvigorated Sony's vision, taking matters a step further, closing-up Sony Mobile HQ and moving it back from Sweden to Tokyo as well as closing various plants and outsourcing production where the firm is unable to remain competitive, maintaining a focus on product-design instead. Other teams have been brought together and more physical assets sold-off in an attempt to unify efforts whilst cutting overheads.

Sony VAIO Duo

It appears as though Kazuo's radical approach may very well have been the right one for Sony. The firm made an operating loss of £123 million in its second quarter, that's almost half of the previous year's quarter and pales in comparison to the £3.53 billion the firm lost last year, which demonstrates a reduction in losses of over seven fold if the trend continues against the previous financial year. Sony has attributed improvements to its mobile market, which include smartphones and portable computers.

What's perhaps most interesting is that, despite all of its closures and scaling-back, the firm managed to increase its quarterly revenue to £12.43 billion, up from £12.20 billion in the same period last year. We wonder how these new revelations and Sony's new working attitude will change the firm going forward.

HEXUS Forums :: 4 Comments

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Apart from making TV, VAIO, PS3, Sony needs to stop doing anything else.
Sony has many areas it is involved in,imaging being one of them in the consumer,research and commerical areas. Their sensors are used in loads of devices.

It is TVs which have lost them a lot of money.
They need to really focus now if they're to prosper. Haven't they only made a profit because they sold off one of their past acquisitions? A chemical company or something?

In gaming, they're losing their grip. The exclusive titles they've once had have now gone multi-platform, and apart from Gran Turismo (which wasn't stellar) and Wipeout which is now defunct, they're pretty much sitting ducks.

I have a Vita, and although the hardware is excellent, the selection of new games on the platform is dire. Stupid things like the proprietary vita-only memory cards doesn't help. There's an extensive psp library to download from ps store but ports of old games aren't going to save this handheld which is supposedly their flagship. And it's not as if Nintendo are their number one threat, more and more people are jumping onto the tablet and mobile phone for casual gaming so they severely need to sort themselves out. ‘Playstation’ was once a household name but their recent performance has hit them hard.
Sony unlike Nokia will bounce back to their former glory.

Besides the tablets I have no gripes with any of the hardware sony produces. The hardware lasts and is well designed with decent quality components. My ps3 (the very first phat model that plays ps2 games) is still going strong after more than five years of daily usage. I have a vita also and although still waiting for some quality titles it's still a fabulous piece of kit and by the end of the first quarter next year there will be plenty of games available.
Televisions made by sony imo have the most realistic picture compared to samsung,lg,toshiba etc, but the price comparison pushes customers towards samsung tvs. Once sony have looked at their pricing model they'll be outselling samsung. However, sony should forget about making tablets so far all their offerings have been apalling.