What's Important in the Financial World (10/19/2012)
Sony Corp. (NYSE: SNE) continues it retreat as most of its business divisions continue to sputter in the face of competition. The company closed a camera and mobile phone factory. It also will "downsize" its headquarters staff. Some 2,000 people will be affected. A layoff that small will not bring Sony back to health or profitability. Its buyout of the half of the Sony-Ericsson smartphone business it did not own was a mistake. The unit's products run well behind those from Apple Inc. (NASDAQ: AAPL) and Samsung and they struggle in a pack that includes LG, Motorola, HTC and Google Inc. (NASDAQ: GOOG). Sony's camera and television operations cannot recover. Camera sales have been hurt by smartphones that have cameras of their own -- good ones. TVs and screens have become a commodity, and the low-margin manufacturers are in China and Korea, not in Japan where labor costs are fairly high. Finally, Sony's game operation faces greater and greater competition from rivals Microsoft and Nintendo. This is another market in which smartphone products have started to supplant those that run on consoles and handheld gaming devices.
Douglas A. McIntyre