“Sony Corp. said it would report an annual loss for the first time in 14 years as plunging LCD television prices and a strong yen are forcing CEO Howard Stringer to pursue his most drastic restructuring measures to date,” Daisuke Wakabayashi reports for The Wall Street Journal. “Crippled by a global economic downturn and intensifying price competition, Sony said it now expects to post a net loss of 150 billion yen, or about $1.65 billion, in the fiscal year ending March 31, 2009, a reversal from an earlier 150 billion yen profit forecast.”
“On an operating basis, Sony forecast a 260 billion yen operating loss, its biggest ever, compared with a previous estimate for a 200 billion yen profit. It also cut sales forecasts by 14% to 7.7 trillion yen,” Wakabayashi reports. “Mr. Stringer, the first non-Japanese executive leading the electronics and entertainment conglomerate since June 2005, said Sony had to accelerate its restructuring plans with a sense of urgency to reduce fixed costs that are too bloated and a supply chain that is too slow.”
Wakabayashi reports, “Last month, Sony said it would cut 16,000 jobs from its electronics divisions and close up to six factories in an attempt to save over 100 billion yen in annual costs.”
“In many ways, Sony’s competition with Apple Inc. captures the challenges facing the company. Apple came to dominate the market that Sony’s Walkman created not with hardware brilliance or manufacturing prowess but with simple-to-use software and elegant design,” Wakabayashi reports.
MacDailyNews Take: Apple’s Click Wheel is the very definition of hardware brilliance. And contracting out the assembly is just smart business, obviously. No, Apple’s iPods are not shaped like beans; they’re just exceedingly small, beautifully built to exacting tolerances, with award-winning industrial design.
Wakabayashi continues, “Sony last posted a full-year loss in its fiscal year ending March 31, 1995 when the company was forced to write down its investment in Columbia Pictures. This would mark the company’s second-ever net loss since it started reporting earnings in 1961. Sony’s three top executives including Mr. Stringer will forgo a bonus for the current fiscal year, while other high-rankings will take significant cuts in salary and bonus.”
Full article here.
[Thanks to MacDailyNews Reader “GizmoDan” for the heads up.]