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Time For Sony To Call The TV Repairman

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Anonymous
August 6, 2005 4:38:39 AM

Archived from groups: alt.tv.tech.hdtv (More info?)

Can new Chairman Stringer stop the bleeding from its largest division?

By Kenji Hall in Tokyo, with Cliff Edwards in San Mateo, Calif.
Updated: 8:00 a.m. ET Aug. 5, 2005
http://www.msnbc.msn.com/id/8840361/

Time was, Sony Corp. (SNE) was an unbeatable force in televisions. Its
Trinitron TVs ruled the business for decades, with consumers worldwide
willing to fork over a premium for Sony's quality guarantee. That makes
the company's July 28 revision of its profit forecast even harder for
its execs to stomach. Sony said it expects to earn just $270 million
this fiscal year, down from an earlier forecast of $1.4 billion. The
primary culprit for Sony's woes, it turns out, is its TV business.

That's a big problem, given that TVs today make up about a third of
Sony's overall sales, up from 15% a decade ago. Since 2000, consumers
have rapidly shifted to flat-panel models, but Sony was slow to see the
trend. Although the company started working on LCD and plasma screens in
the 1970s, in the '80s and '90s its managers were focused on building up
the movie business and were wary of investing in new factories.
Meanwhile, rivals such as Samsung (SHCAY), Sharp, and Matsushita (MC)
got a head start on the new technology. As sales of flat panels boomed,
Sony's share of the global TV market shrank from more than 10% in the
late '90s to 6.5% last year. "Sony is in trouble because it was late in
launching flat-panel TVs," says Credit Suisse First Boston analyst Koya
Tabata.

That puts lots of pressure on Howard Stringer, Sony's new chairman. As
the Welshman, who took over the company in June, formulates a strategy
for rescuing Sony, turning around TVs should top his to-do list.
"Stringer will need to change the structure of Sony's TV business faster
than planned," says Merrill Lynch & Co. (MER) analyst Hitoshi Kuriyama.
Stringer isn't scheduled to announce details of his overhaul until
September, but already some basic outlines are clear. Sony plans to
close a cathode-ray-tube TV plant in Britain. And it is rushing new
HDTVs to market, while launching a major ad campaign that emphasizes
their clear, bright pictures. Soon, the company expects to install in
its high-end televisions a newfangled processor to improve high-
definition images, called the Cell chip, that Sony developed with IBM
(IBM) and Toshiba Corp. (TOSBF)

"THE COLLAPSE OF PRICING"

At the same time it rethinks its TV business, Sony continues to cut
overall costs. In the past two years the company has eliminated more
than 15,000 jobs, saving about $3 billion. Sony says it will spend an
additional $791 million on restructuring this year, and analysts predict
10,000 more jobs could be cut.

Even so, Sony's TV division remains deeply troubled. This fiscal year,
Sony expects to sell 2.5 million LCD TVs, up from 1 million last year,
and 1.4 million rear-projection LCD TVs, up from 650,000 in 2004. But in
the April-June quarter alone, prices for LCD TV sets in the U.S. dropped
by nearly 50%. The unit will likely lose $1.3 billion this year, Mizuho
Securities figures. Though the U.S. market is relatively solid, "we're
in a peculiar situation because of the collapse of pricing," says Dick
Komiyama, president of Sony Electronics Inc. Nomura Securities Co. (NMR)
estimates that Sony's TVs cost 3% more to make than they bring in from
sales. And Merrill Lynch asserts that Sony's strategy of undercutting
Sharp's and Matsushita's prices for flat-panel TVs in Japan by at least
10% risks tainting Sony as a discount brand in its home market.

Despite the TV unit's problems, few think Stringer will spin it off. The
division is just too important, and Merrill estimates that Sony pours
$1.3 billion a year into research and development. Stringer has said he
prefers to integrate the conglomerate's fractured units and look for an
"opportunity down the road" that might let Sony wed its music and movies
to consumer electronics. If he doesn't fix the TV business, though, Sony
will find that road mighty bumpy.
September 16, 2005 3:30:16 PM

Archived from groups: alt.tv.tech.hdtv (More info?)

On Sat, 06 Aug 2005 00:38:39 GMT, RobH <Rob@aol.com> wrote:

>Can new Chairman Stringer stop the bleeding from its largest division?
>
>By Kenji Hall in Tokyo, with Cliff Edwards in San Mateo, Calif.
>Updated: 8:00 a.m. ET Aug. 5, 2005
>http://www.msnbc.msn.com/id/8840361/
>
>Time was, Sony Corp. (SNE) was an unbeatable force in televisions.
>...
> Soon, the company expects to install in
>its high-end televisions a newfangled processor to improve high-
>definition images, called the Cell chip, that Sony developed with IBM
>(IBM) and Toshiba Corp. (TOSBF)
>...
>Despite the TV unit's problems, few think Stringer will spin it off. The
>division is just too important, and Merrill estimates that Sony pours
>$1.3 billion a year into research and development. Stringer has said he
>prefers to integrate the conglomerate's fractured units and look for an
>"opportunity down the road" that might let Sony wed its music and movies
>to consumer electronics. If he doesn't fix the TV business, though, Sony
>will find that road mighty bumpy.

Oh joy. Sony, Cell chips, and "opportunity down the road" ;) 

I bought my first non-sony tv this summer.
Anonymous
September 17, 2005 3:30:23 AM

Archived from groups: alt.tv.tech.hdtv (More info?)

@ wrote:
> On Sat, 06 Aug 2005 00:38:39 GMT, RobH <Rob@aol.com> wrote:
>
>
>>Can new Chairman Stringer stop the bleeding from its largest division?
>>
>>By Kenji Hall in Tokyo, with Cliff Edwards in San Mateo, Calif.
>>Updated: 8:00 a.m. ET Aug. 5, 2005
>>http://www.msnbc.msn.com/id/8840361/
>>
>>Time was, Sony Corp. (SNE) was an unbeatable force in televisions.
>>...
>>Soon, the company expects to install in
>>its high-end televisions a newfangled processor to improve high-
>>definition images, called the Cell chip, that Sony developed with IBM
>>(IBM) and Toshiba Corp. (TOSBF)
>>...
>>Despite the TV unit's problems, few think Stringer will spin it off. The
>>division is just too important, and Merrill estimates that Sony pours
>>$1.3 billion a year into research and development. Stringer has said he
>>prefers to integrate the conglomerate's fractured units and look for an
>>"opportunity down the road" that might let Sony wed its music and movies
>>to consumer electronics. If he doesn't fix the TV business, though, Sony
>>will find that road mighty bumpy.
>
>
> Oh joy. Sony, Cell chips, and "opportunity down the road" ;) 
>
> I bought my first non-sony tv this summer.
>
>
Hi,
I never like Sony anything.
Sony is relatively YOUNG company compared to Panasonic, Hitachi, Toshiba.
Tony
Related resources
Anonymous
September 17, 2005 11:36:18 AM

Archived from groups: alt.tv.tech.hdtv (More info?)

"Tony Hwang" <dragon40@shaw.ca> wrote in message
news:jAIWe.503346$s54.378024@pd7tw2no...
>@ wrote:
>> On Sat, 06 Aug 2005 00:38:39 GMT, RobH <Rob@aol.com> wrote:
>>
>>
>>>Can new Chairman Stringer stop the bleeding from its largest division?
>>>
>>>By Kenji Hall in Tokyo, with Cliff Edwards in San Mateo, Calif.
>>>Updated: 8:00 a.m. ET Aug. 5, 2005
>>>http://www.msnbc.msn.com/id/8840361/
>>>
>>>Time was, Sony Corp. (SNE) was an unbeatable force in televisions. ...
>>>Soon, the company expects to install in its high-end televisions a
>>>newfangled processor to improve high-
>>>definition images, called the Cell chip, that Sony developed with IBM
>>>(IBM) and Toshiba Corp. (TOSBF)
>>>...
>>>Despite the TV unit's problems, few think Stringer will spin it off. The
>>>division is just too important, and Merrill estimates that Sony pours
>>>$1.3 billion a year into research and development. Stringer has said he
>>>prefers to integrate the conglomerate's fractured units and look for an
>>>"opportunity down the road" that might let Sony wed its music and movies
>>>to consumer electronics. If he doesn't fix the TV business, though, Sony
>>>will find that road mighty bumpy.
>>
>>
>> Oh joy. Sony, Cell chips, and "opportunity down the road" ;) 
>>
>> I bought my first non-sony tv this summer.
> Hi,
> I never like Sony anything.
> Sony is relatively YOUNG company compared to Panasonic, Hitachi, Toshiba.
> Tony

They all have their issues and values vary with different product types.
Overall, Sony has better support than Panasonic or Toshiba. Hitachi and
Sony are still some of the best products in terms of customer and service
support. Even P & T are better than many other brands in this regard. They
all have their dogs...

Leonard
Anonymous
September 18, 2005 6:11:20 AM

Archived from groups: alt.tv.tech.hdtv (More info?)

Sony certainly managed to get on my (*very* exclusive) list of companies
which have a lifetime boycott by me. [Hell is still trying to achieve
the level of incompetence I experienced from Sony customer "service"
but they still haven't come close].

If Sony were to come out with immortality, I'd give it a miss till
a different vendor came out with a competing product :-).
--
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