Moody’s reviews beleaguered Sony for possible ratings downgrade

“Moody’s Investors Service put Sony Corp. on review for a possible ratings downgrade Monday, citing doubts about the troubled Japanese electronics company’s revival plan announced last week,” The Associated Press reports. “The review reflects concern that Sony’s mid-term business plan will be unable “to regain the strong profit and cash flow generation patterns seen in its past,” Moody’s said in a statement, adding that the survey could lead to a downgrade of the A1 ratings of Sony and its supported subsidiaries. That’s four rungs below the top credit rating, Aaa.”

The Associated Press reports, “The shake up calls for slashing 10,000 jobs, or about 6 percent of Sony Corp.’s global work force by the end of March 2008. It will also close 11 of its 65 manufacturing plants and shrinking or eliminating 15 unprofitable electronics operations by the same deadline. Sony refused to say what those businesses were.”

“Aside from the cost cuts, Sony said it would now focus on so-called ‘champion products’ including the PlayStation 3 next-generation video-game console, Bravia liquid crystal display televisions and the Walkman MP3 music players _ which have fallen miserably behind Apple Computer Inc.’s iPod,” The Associated Press reports. “Analysts generally were not impressed by the plan, saying it lacked vision and creativity… investors drove down Sony’s stock 120 yen, or 3.1 percent, to 3,820 yen. The stock has lost about two-thirds of its value over the last five years.”

Full article here.
Walkman MP3 players are “champion products?” No, they’re not. Sony ought to forget it, it’s too little, too late. They lost the portable digital music player market long ago. Focus on TVs and game consoles, Sony, those are markets where you still have a chance to do well. Also, figure out better and more ways to work closely with Apple, instead of petulantly withholding your music label signatures and delaying iTunes Music Store Japan and Australia.

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