"Sony axes 10,000 workers"
Axes them what?
Sony Corp confirmed today that it will lay off 10,000 workers worldwide in a move to turn around its TV biz, strengthen its core digital imaging, gaming and mobile divisions, and chase sales in emerging markets. The consumer electronics giant's newly installed CEO Kazuo Hirai hoped that his strategy would allow loss-making Sony …
"Sony axes 10,000 workers"
Axes them what?
"Additionally, the company will move into the medical equipment components sector and the life science industry"
Oh No. Turn around what you know about first (i.e. TVs would be a good start).
Almost no-one is actually making profit in the TV making business. Samsung (and maybe LG) are profitable with a combination of massive scale and in house panel production and excellent industrial design. The combination of falling prices, now falling volumes (CRT replacement more than 1/2 complete in developed world) and the fact that making an OK product (good enough picture for most people) is much easier than it used to be combine to destroy profit margins.
Sony may continue in TV business as it is still a massive part of the electronics business and its loss would have knock on effects on other parts of the business including the build up of network entertainment services but I don't expect to see sustained profits from Sony's TV business unless the overall market dynamic changes. Maybe Samsung increasing their margins as people increasingly recognise that they are the top brand will help but that may also let some of the newer chinese competitors into the market.
This isn't only a Sony problem though, Panasonic, Toshiba, Sharp, Philips are all finding TV profits hard to achieve.
SONY's problem is that they still overcharge for what they are selling , they think they are Apple and they arent!
They used to be.
Your point is well made and the FT shares the same view:
It speculates that Sony, Panasonic, Sharp and some other companies might conceivably be interested in joining forces. That'd thwart competition.
Can you define "overcharge"?
You say "they still overcharge" but they are making a loss. They can't cut prices without losing money on every TV and no they can't make it up with volume.
I would be interested if you could point to an overpriced product and by what criteria because I think that they are pretty competitive (although admittedly not the cheapest). Dixons is selling a 32" LED 1080P 3D capable Freeview HD Sony TV with Internet services for £379 which sounds competitive to me (although without the glasses I expect). It is £10 less than a similar Samsung without 3D (3D is £100 more). I believe both these products are near end of life but each year's product improvement is dropping.
I'm not saying that all the prices are as good as some competitors but that certainly isn't due to excessive mark up. It might be that they aren't as efficient as some and which may be a mix of higher quality in some ways and inefficiency or high component cost.
I think one part may the distance grown between the increasingly outsourced production and the design and development side. Also the lack of in house panel development may also be a factor as competitors can design both together to make it a little more efficient to make.
Hmm, I guess that being a huge lumbering corp. without an obsessive controlfreak at the helm makes it a lot harder to turn a profit.
This can't really be a surprise to anyone - between looking at how an initially promising partnership went the way of the dodo (Sony-Ericsson - initially the line that set the bar for good phones with great digital cameras, eventually a line so bloated that even after pruning the catalogue it still had 98 different models) and looking at just how painfully they set themselves up with the PS3 (selling at a loss even when it cost north of £600, compared to Nintendo's less technically-proficient but always-profitable Wii), not to mention their sloppy approach to customer data, Sony have long been looking like a company that's gotten too big to be usefully responsive.
This time, it might be Sony... So whose next.. Samsung, Apple, Facebook, Google
When they are at the top, the only other place to go is down...
They used to be the biggest name in TVs, I have had theirs since the early 80s.
Their mid and upper range TVs still sell to the knowleagable, but competing on cheap TVs no hope.
I know a few people with Samsung - TVs are fine, similar prices to Sony as well.
Huge list of things they are doing to turn around profits, didn't read a single thing about customer relations, perhaps someone should send the MD this link:
to give 'em some ideas.
Hint: They're not doing so well - their success rate is 28.82 out of a 100, 334 negative comments vs 14 positive