Winnipeg Free Press - PRINT EDITION

'Sony would be better off without the TV business'

  • Print

TOKYO -- Sony chief executive officer Kazuo Hirai is treating his TV unit like another Chrysler: an ailing business that can be revived with sufficient cash. Investors say it's more like General Motors's Oldsmobile, better shuttered than saved.

Hirai has pledged to make profits at the TV unit by March 2014 after losing 692 billion yen ($8.7 billion) in the past eight years. He cut the number of models and ended a panel- making venture as part of his turnaround plan. Investors say it's too much effort for too little return.

"Sony would be better off without the TV business," said Tetsuro Ii, president of Commons Asset Management in Tokyo. Investors "are hoping the company won't end up becoming like GM," said Ii, who will buy its stock only when Sony "shows the competitive advantage it used to have over global peers."

Sony will lose 80 billion yen on TVs this year, the company said in August as it cut the sales target to 15.5 million units from 17.5 million. Struggles with the unit have contributed to four consecutive annual losses for Sony and a 92 per cent plunge in its market value since a peak about 12 years ago.

It will take another three years of losses, totaling 127 billion yen, before TVs become profitable again, according to the average of four estimates compiled by Bloomberg.

Sony was downgraded twice this year by Moody's Investors Service and Standard & Poor's. Both ratings companies have questioned whether Sony can ever recover in the TV market.

Hirai, who took over from Howard Stringer in April, has slashed the number of Bravia models in North America to 22 from 40 to cut costs. He also ended a partnership with Sharp for making liquid-crystal display TV panels, and last year Sony exited a similar venture with Samsung Electronics Co. The Tokyo-based company says terminating the ventures will save more than 50 billion yen annually because it will be able to get better prices buying panels on the open market rather than from its partners.

"It would certainly be positive if Sony could turn around the TV business," said Yoshihiro Okumura, a general manager at Chiba-Gin Asset Management.

"But it's still not clear what product the company can count on to drive its earnings."

Within two weeks of taking the helm, Hirai spelled out his three "core business" priorities: mobile devices, games and digital imaging -- not TVs. He vowed "painful cost cuts" and announced plans to eliminate 10,000 workers, or about 6 per cent of the workforce.

That doesn't mean Hirai plans to close down TVs. Sony and Panasonic announced a partnership in June to develop sets using organic light-emitting diode, or OLED, technology that can be as thin as 4 millimeters (0.16 inches) and produce images 200 times sharper than current LCD models.

"Sony has a very deep DNA in creating the best picture and the best sound," Hirai, 51, said Oct. 2 at an industry exhibition near Tokyo.

The troubles at Sony -- with an empire that spans manufacturing, music and movie production, and insurance -- mirror those of Detroit's carmakers.

Burdened with too much manufacturing capacity and too few customers, GM killed off Oldsmobile, Saturn and Pontiac before it returned to health with U.S. government support.

U.S. car companies "were producing so many cars, so many brands, that they became meaningless," said Sohrab Vossoughi, founder of, a design consultant in Portland, Ore., whose clients have included Samsung, Sony, Panasonic and LG Electronics. "What does GM mean to a consumer? ...The same thing has happened to Japan."

Sony, Panasonic and Sharp, once symbols of Japan's dominance in electronics, have lost ground in TVs, phones and tablet computers to competitors such as Apple, Samsung and LG. The Japanese trio posted a combined 1.6 trillion-yen loss last year as a decline in global TV shipments and a stronger yen hurt sales.

Having the most advanced technology, once a key strength of the Japanese companies, matters less now. Consumers are increasingly paying attention to content and apps rather than hardware specifications.

"Sony hasn't really put its words into action," said Ichiro Takamatsu, a fund manager at Tokyo-based Bayview Asset Management. "I can't really trust anything until I see results."

-- Bloomberg News

Republished from the Winnipeg Free Press print edition November 2, 2012 B11

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Key of Bart - Four Little Games

View more like this

Photo Store Gallery

  • JJOE.BRYKSA@FREEPRESS.MB.CA Local-Postcard  Day-Horror frost and fog created a most beautiful setting at Assiniboine Park Thursday morning in WInnipeg- Enviroent Canada says the fog will lifet this morning and will see a high of -7C-  JOE BRYKSA/WINNIPEG FREE PRESS- Feb 18, 2010
  • A red squirrel peaks out of the shade in a tree in East Fort Garry, Sunday, September 9, 2012. (TREVOR HAGAN/WINNIPEG FREE PRESS)

View More Gallery Photos


Are you concerned about the number of homicides so far this year?

View Results

Ads by Google