Analyst expects Sony losses to be six times higher than expected(1.6 billion dollars)
- Thread starter Brimstone
- Start date
From their original forecast for the year of 290 billion yen net, yeah this is like 440 billion yen short of that, which in *todays* dollars would be a ~$5B shortfall. Operating profit was expected to be (originally) 450 billion yen, and so the spread there is 710 billion yen, or ~$8B today.
But I emphasize today, because remember if Sony had hit its targets at the expected 100-110 yen exchange rate, those profits would have been lower than the amount implied above. So realistically in dollar terms the spreads are lower than above, but those are the absolute values.
Certainly rough. If they do cut those costs to the expected degree, should take them back to neutral. They report their quarter next week, so we'll get a much more full-flavored idea as to what division did what, and what direction the company is going to head in.
Agreed ! I'd probably emphasize this part:
"eats/lives/breathes the technology his company puts out."
...more than tech focus.
Jobs is highly calibrated to the consumers needs. One of his best gifts is to know when to say "No" (and he says "No" often). Kaz and Kutaragi may have said "Yes" to projects too many times (or too early). At least Kutaragi has the ambition and tenacity to stick to what he bet on (like Jobs). Kaz is too "new" for me to know what to say of him.
To cut cost, they may also pare down their million SKUs and focus more on the strategic ones. e.g., I don't know what "Rolly Polly" is for.
I don't know about Jobs really being attuned to what the consumers want.
He puts a stake down and sells it. He didn't want towers with as many expansion slots as some were asking for, he didn't want skinning in the UI and he sells those closed boxes or all-in-ones with the integrated monitors.
He doesn't allow replaceable batteries in the appliances because he values thinness above it, etc.
And he's been able to convince enough people that those design choices are the right way.
But it's the software which is the secret sauce. Any chance Sony might have had to battle it out for MP3 players was destroyed by sticking with Atrac and the poor media management software.
They hired some former Apple engineers but it doesn't sound like the overall quality of the software has improved.
I remember Jobs boasting how the Apple remote is this little thing with maybe two buttons while those of a competitor had dozens. Inevitably, that streamlining means a lot of checklist features are not on Apple products, like support for every codec used.
But he's sold it.
He puts a stake down and sells it. He didn't want towers with as many expansion slots as some were asking for, he didn't want skinning in the UI and he sells those closed boxes or all-in-ones with the integrated monitors.
He doesn't allow replaceable batteries in the appliances because he values thinness above it, etc.
And he's been able to convince enough people that those design choices are the right way.
But it's the software which is the secret sauce. Any chance Sony might have had to battle it out for MP3 players was destroyed by sticking with Atrac and the poor media management software.
They hired some former Apple engineers but it doesn't sound like the overall quality of the software has improved.
I remember Jobs boasting how the Apple remote is this little thing with maybe two buttons while those of a competitor had dozens. Inevitably, that streamlining means a lot of checklist features are not on Apple products, like support for every codec used.
But he's sold it.
ShadowRunner
Veteran
Care to explain for the uneducated?
The net loss is what Sony actually expects to lose this year in an absolute sense, and the operating loss is the loss metric relative to income vs expenses. It's easier to grasp when thinking about profit, since operating profits are usually higher than net profits, as they are the profits before interest, tax, etc..
The reasons for the difference between the two figures in this particular situation I don't think we'll know until the financials come out, but there are going to be extraordinary items somewhere in the mix. Probably the restructuring charges for Q4 will figure into the revised year-end predictions.
They have a quarter left though for things to get better or worse for them (or just different), and in these wacky times, anything is possible. The best case scenario for them would be for a quick and serious decline in the value of the yen.
The phrase you used there is pretty ironic as 10 years ago it would have had a very different meaning. Today, however, I can't help but point out that "where they are" isn't a very good place. It's to their credit that they recognized that they were on the wrong path relative to the market some time ago and took steps (most notable of which was hiring Stringer to bring about the necessary changes) to address it before it was too late.
The markets that Sony operate in have changed dramatically over the last 20 years.
- Making a TV that lasts 10 years suddenly becomes less important when the pace of technological innovation encourages consumers to replace that TV within 5.
- The barrier of entry to compete in the consumer electronics sector has continued to get lower and lower allowing more and more smaller players in that can operate at thinner margins.
- The time that manufacturers can charge a premium for new technologies has gotten shorter and shorter making it harder to recoup R&D costs.
- Consumers seem to be more willing to settle for a product that's 90% as good as long as it's 75% (or less) of the price.
Very good points...nowadays there's very little incentive to buy something made by SONY when you could buy a similar or even superior product for the same or less money.
If you look at the CE products that SONY makes today which product would attract you to buy instead of something from another company?
thatdude90210
Regular
A big thing they lost was the Trinitron advantage. Their flatter screen CRT really were worth the extra cost. But with plasmas and LCD, it's a fresh start for everyone. Even nobodies like Vizio can come in and take a big chunk of the market.
Sonys hi-end Bravia LCD TVs are certainly pretty popular and for good reasons I would say. I´ve been following some discussion boards up until I bought a new TV a month ago. While Samsung have some feature packed hi-end TVs, the quality of their screens are all over the place even on some of their more expensive ones.
But yeah, if you aren´t to picky about the quality then there are tonns of cheap TV sets out there.
Mintmaster
Veteran
Today you're probably right. Bravia's seem like a ripoff to me, but only in comparison to plasmas.
But even as recently as a few years ago, SXRD was really the only option for reasonably priced big screens for those of us who saw DLP rainbows and didn't want crap contrast ratios. It used to be a toss up between Canon and Sony for camcorders, too.
I guess eventually technology trickles down and companies like Sony can't find ways to create meaningful differentiation for higher margin products.
I've never really had good luck with sony products and growing up they were never tied in my mind to quality. When I bought my 42inch vizio for $800 last year the closest sony 42inch 1080p tv was around $1700-$1800 and my vizio came with a 2 year warrenty and 90day return policy. Sure my vizio didn't look as good as that sony , mabye 90% of the quality. However I could have bought two Vizios for the price of the sony and I'm sure in another 4 years or so I will be ready to buy a new tv and I can again buy again because of the original savings on that first tv that is still sitting in my bank account.
Sony has only themselves to blame! We all know what were Sony problems for years! They keep making the same mistakes over and over again, never wanting for change, when someone like Kutaragi tried to reconcile Sony divisions and pave a new path for the ailing giant, they fired him! The recession is a timely final reminder that will hit them hard. My care for Sony is falling to a big zero under Stringer, nothing much has change after all his firing and cuts. Sony can never be an Apple, why not keep what they do good and stop making the same mistakes?!
Apple has missteps too..funny Acer just recently blew past them for third place PC vendor on the strength of netbook sales..macbook air was laughable imo, and Apple totally missed the netbook thing. Small notebooks>light notebooks and Apple totally missed that.
I dunno, Apple is interesting to me..especially if the economy is going to tank I dont know if software is going to be where it's at, it's too easy to pirate. Hardware isnt politically correct, but it might be a better place to be. Apple makes a lot more money off Ipods than they do Itunes. People cant pirate hardware, they just carry around Ipods loaded with pirated MP3's. Similarly Apple is nailed to the hardware of course on Macs. Have to buy the hardware to get the software and again, I suspect that might be good for business .
Sony OTOH in TV's..yeah thats a commoditize problem.
Ms is in hardware in Zune, which fell flat..and gaming, which is exactly where you dont wanna be in hardware because it's a loss leader..all this neither here nor there, just thoughts on the relative positions of Apple, Ms and Sony.
Of course Sony and other hardware companies envy the crap out of Apple, because their products have successfully beat the commodity business. People have to have and pay extra for an Ipod, not just an MP3 player. Thats the dream for the hardware companies. Of course most people here are sophisticated enough to already know that.
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You don't pirate OSes and services! The idea here isn't Sony becoming a B&M software developer where you buy Sony Video Editor off the shelf at PC World. It's about embedded software to provide a better experience. iPods became popular not so much because of the hardware, but the software which was head-and-shoulders above the competition. I think the idea here is the hardware is all becoming much of kind and it's the software end that differentiaties it. In the case of BRavia, it could be set that Sony's image rendering tech on a generic TV screen would give them the visual advantage over rivals without Sony having to develop fancy screen tech. That's what I understand from the software direction.
Personally I think that'd be a Bad Thing. And as long as they're in the professional markets, they need to innovate hardware, which should see trickle-down. OLED is way too pricey now, but it seems perfect for movie and TV production who'll pay the premium, funding refinements of the tech until it becomes mainstream. I think the Trinitron effect is something to aim for. It's a rare thing, but it's so profitable it sets a company up for the enxt decade. Chasing markets and dropping them 4 times out of 5 isn't bad if you get a runaway success with attempt 5. As long as you can afford it!
Bingo. Quite a change in the market.
I don't think what Sony is looking to do is to charge the customer less if that's the angle people are picking up on, but to spend less themselves on technology that is generally ubiquitous/transparent to the consumer. Their hope is that they can offer value-add and differentiation through the software/experience to warrant the brand premium, vs trying to compete on the hardware level where differences are hard to spot.
But in truth all we have is some short soundbites to go on so far; we might as well wait until the 29th to see what gets fleshed out.
But in truth all we have is some short soundbites to go on so far; we might as well wait until the 29th to see what gets fleshed out.
iPod prices aren't at that much of a premium to other brands. Except maybe for the Touch.
Of course, the Sansas and the Zunes will often be sold at steeper discounts to the SRP or with things like gift cards. But this past Xmas, even iPods were sold with promotions. It helped them sell over 22 million this past Xmas quarter.
Yeah a netbook would be great from Apple. But it might undermine their macBook sales, which sold well after the intro. of the aluminum block models. At the time the Air came out, it was competitive with other premium slim models. There were VAIOs in a 4 pounds or less form factor selling for over $2000.
Of course, the Sansas and the Zunes will often be sold at steeper discounts to the SRP or with things like gift cards. But this past Xmas, even iPods were sold with promotions. It helped them sell over 22 million this past Xmas quarter.
Yeah a netbook would be great from Apple. But it might undermine their macBook sales, which sold well after the intro. of the aluminum block models. At the time the Air came out, it was competitive with other premium slim models. There were VAIOs in a 4 pounds or less form factor selling for over $2000.
Mintmaster
Veteran
The MacBook Air absolutely was a good product when it came out. 3lb computers were $1500 or more, so Apple had every right to charge so much. Its window of opportunity was very small, though, as netbooks came out soon after. Now it's a niche product for people who want to spend 3x the price for a little more speed, and there competition from Lenovo, too.