As one of its core businesses, Sony’s flat-panel TVs have been losing money for seven consecutive years.
On May 26th, the Japanese electronics giant Sony released its annual report for the fiscal year ended March 31, 2011, accounting for nearly half of its total revenue. Consumer, professional electronics and components group achieved 3.57 trillion yen (US$43 billion) sales revenue However, the operating profit was only 2.9 billion yen (35 million US dollars). The TV business with sales revenue exceeding US$13 billion and originally expected to be reversed recorded a huge loss of US$926.4 million, which is the seventh loss year for Sony TV.
“In the past seven years, our top executives in the television business have changed three positions, from Ibara Masaru to Yoshioka Hiroshi, and then to Ishida Ishihisa, who is known as a turnaround expert within Sony.†June 2, Sony China An executive told reporters that the number of employees in the Sony TV business has decreased by 30%, and the proportion of production outsourcing has also increased from the initial 10% to nearly 40%, but no profit has yet been seen.
Losses for 7 consecutive years
The total amount of losses has exceeded the continuous loss of 5 billion U.S. dollars for TV services. Sony (China) Co., Ltd. pointed out in a written reply to this reporter that "Sony's TV business is adversely affected by the appreciation of the yen and the overall price of the market. The impact of the factors is currently at a loss."
The caliber of the Sony Group CFO Kato Youu in an interview with the "Japan Sankei Shimbun" on June 1st is that in the fiscal year ending in March 2012, Sony will be able to reduce the operating loss of the TV business by at least 50%.
This means that Sony TV business may lose for the eighth consecutive year, and in the past seven years, the total amount of its losses has exceeded 5 billion US dollars.
The loss of Sony TV business in the past 7 years has its own reasons. The initial losses in 2004 and 2005 are strategic losses, in order to deal with the inventory of CRT TV as soon as possible, and let the LCD TV business seize market share.
Following a loss of US$900 million in fiscal year 2005 and a loss of US$300 million in fiscal year 2006, Sony’s TV business once reached a market share of 19.7% in fiscal 2007, and even temporarily turned losses in the first half of fiscal year 2008.
However, the long-term success did not last long. The sudden financial crisis in the second half of 2008 made Sony's efforts go awry. The appreciation of the yen by 40%, while the devaluation of the won by 30%, makes Sony in absolute competition with Samsung and LG Electronics.
In order to maintain its market share, Sony TV business suffered a loss of 2 billion U.S. dollars in fiscal 2008, and its share has also dropped to the third in the industry since the second half of fiscal year 2009.
In fact, after Ishida took office for a long time, he carried out a series of asset-light reforms. However, due to the appreciation of the yen after the financial crisis and the continuous drop in the price of LCD TVs, the loss situation has not been reversed.
In order to get out of the loss, after Ishida took over the television business in April 2009, his first order was to introduce some practices of the PC industry into the television business. The nine Sony TV factories worldwide had been compressed to four in March this year. Its factories in Mexico and Slovakia were sold to the Hon Hai Group, while the two Spanish factories were sold to local companies.
However, this "light asset" measure did not bring immediate results. At least the huge losses that occurred in fiscal 2010 showed the problem. In fact, Sony predicted at the beginning of fiscal 2010 that its television business in fiscal year 2010-2011 would lose money and shipments would reach 25 million units. However, in January of this year, Ishida Ichita admitted that this goal has been difficult to achieve.
Panel sleepy
Sony, like China's color TV companies, also suffered from the pain of the panel. Sony told this reporter that “the structural adjustments made by the company have gradually shown effects, and the cost of production materials based on panel procurement has been declining. China, etc. Demand for emerging markets continues to grow, and Sony will provide a more rational product model portfolio for emerging market characteristics and strive to realize the profitability of the LCD TV business as soon as possible."
This explanation also reflects, to some extent, the obstacles faced by Sony's TV business. In fact, Kato Yu blames the loss of the TV business on the impact of panel price changes. According to its statement, in the first half of fiscal year 2010, the number of large-scale panels purchased by Sony did not reach the planned amount. In the second half, Sony could not use the panel. Falling prices advantage.
Sony China further explained that, "After all, Sony's losses in the era of LCD TVs are similar to those of Chinese companies, because the upper panel is subject to people."
The reporter learned that Samsung Electronics and other companies have invested in large-size LCD panels since 2001, and now Samsung has 6 LCD panel production lines more than 7 generations, while LG also has more than 6 generations of production lines, and Sony At first it was still indulging in the glory of the Trinidad era.
Until April 2004, Sony and Samsung Electronics signed a joint venture agreement to establish S-LCD LCD panel company, Sony has a 50% stake. It was not until 2005 that Sony began to use S-LCD 7-generation line panels. By July 2007, Sony began to use 8th-generation line panels.
However, because S-LCD's core technology is owned by Samsung, and the three high-generation lines of S-LCD can only guarantee to Sony's monthly production capacity of 90,000 pieces, this can only guarantee 50% of the needs of Sony TV, in order to solve the gap in the panel. Sony has been purchasing from AUO, Chi Mei, etc., and from 2011 it has even begun to resume buying panels from LGD.
Fluctuations in LCD panel prices are beyond Sony’s control. Sony’s sources revealed that “As panel prices rose before May 2010, Sony did not purchase enough panels to cause supply shortages. In June, panel prices fell for 11 consecutive months. Sony Although a large number of panels were purchased, the panel continued to depreciate and Sony suffered a drop in price."
It is worth noting that Sony's plan to participate in Sharp's 10th-generation line has also been postponed because of the financial crisis, and its lack of upstream in the LCD TV era has become the biggest pain.
Xie Qinyi, vice president of market research firm Display search Greater China, told this reporter that “like the color TV companies in mainland China, Sony is also suffering from the panel, and due to the large shipments of LCD TVs and the appreciation of the yen, etc. Its loss is even greater."
Some experts pointed out that in the era of CRT TVs, Sony has greatly reduced its management costs through its globally and relatively complete supply chain management system. However, in the era of LCD TVs, due to the lack of panel control, it cannot establish its own independent supply chain system in various regions of the world. .
3D, Internet TV self-help
We hope to use technology upgrade opportunities to catch up with opponents. Ishida Kazuhisa, who took office in 2009, not only promoted a light asset strategy at Sony, outsourced more television production to Hon Hai, etc. to reduce costs, but also hoped to use new technologies to develop R&D. Make up for the weakness of the panel.
According to reports, he conducts weekly telephone conversations with retailers to collect sales data from Sony TV. This is a common practice in the PC industry, allowing manufacturers to adjust production plans based on the latest sales data.
At the same time, Sony began to accelerate the pace of product development and adjust the direction of R&D. Sony insiders revealed that Sony has reduced the number of hardware and software platforms in order to accelerate the development of television products. Ishida Kazuhisa even asked engineers to reduce their attention to picture quality because most users do not see the difference.
In the ordinary LCD TV field is difficult to surpass Samsung, Sony hopes to use technology upgrade opportunities to catch up with opponents, including from the CCFL backlight to the LED backlight upgrade, from 2D to 3D upgrades, from digital TV to Internet TV upgrades.
At present, Sony is beginning to focus on 3D and Google TV. Sony and other Japanese TV companies are leading South Korean companies such as Samsung in the research and development of 3D technology. Sony is also using 3D for LCD TVs, PS3s, HD cameras, and HD digital cameras. Connected with Blu-ray technology, using the overall concept of "3D World" to hit the market. Sony's strategy has played a certain role. Currently, Sony and Samsung are leading the global 3D TV shipments, and even more than 45% in the Chinese and Japanese markets.
Sony also took the lead in launching the first TV with Google Internet TV platform. This product allows users to search for web videos and watch live webcasts. Sony insiders revealed that Sony's Google TV took only 13 months from planning to launch, which is half of the conventional development cycle for similar products. Obviously, Sony hopes to grab the commanding heights of Internet TV by speeding up R&D. But these are all facing pressure from competitors' rapid follow-up.
On May 26th, the Japanese electronics giant Sony released its annual report for the fiscal year ended March 31, 2011, accounting for nearly half of its total revenue. Consumer, professional electronics and components group achieved 3.57 trillion yen (US$43 billion) sales revenue However, the operating profit was only 2.9 billion yen (35 million US dollars). The TV business with sales revenue exceeding US$13 billion and originally expected to be reversed recorded a huge loss of US$926.4 million, which is the seventh loss year for Sony TV.
“In the past seven years, our top executives in the television business have changed three positions, from Ibara Masaru to Yoshioka Hiroshi, and then to Ishida Ishihisa, who is known as a turnaround expert within Sony.†June 2, Sony China An executive told reporters that the number of employees in the Sony TV business has decreased by 30%, and the proportion of production outsourcing has also increased from the initial 10% to nearly 40%, but no profit has yet been seen.
Losses for 7 consecutive years
The total amount of losses has exceeded the continuous loss of 5 billion U.S. dollars for TV services. Sony (China) Co., Ltd. pointed out in a written reply to this reporter that "Sony's TV business is adversely affected by the appreciation of the yen and the overall price of the market. The impact of the factors is currently at a loss."
The caliber of the Sony Group CFO Kato Youu in an interview with the "Japan Sankei Shimbun" on June 1st is that in the fiscal year ending in March 2012, Sony will be able to reduce the operating loss of the TV business by at least 50%.
This means that Sony TV business may lose for the eighth consecutive year, and in the past seven years, the total amount of its losses has exceeded 5 billion US dollars.
The loss of Sony TV business in the past 7 years has its own reasons. The initial losses in 2004 and 2005 are strategic losses, in order to deal with the inventory of CRT TV as soon as possible, and let the LCD TV business seize market share.
Following a loss of US$900 million in fiscal year 2005 and a loss of US$300 million in fiscal year 2006, Sony’s TV business once reached a market share of 19.7% in fiscal 2007, and even temporarily turned losses in the first half of fiscal year 2008.
However, the long-term success did not last long. The sudden financial crisis in the second half of 2008 made Sony's efforts go awry. The appreciation of the yen by 40%, while the devaluation of the won by 30%, makes Sony in absolute competition with Samsung and LG Electronics.
In order to maintain its market share, Sony TV business suffered a loss of 2 billion U.S. dollars in fiscal 2008, and its share has also dropped to the third in the industry since the second half of fiscal year 2009.
In fact, after Ishida took office for a long time, he carried out a series of asset-light reforms. However, due to the appreciation of the yen after the financial crisis and the continuous drop in the price of LCD TVs, the loss situation has not been reversed.
In order to get out of the loss, after Ishida took over the television business in April 2009, his first order was to introduce some practices of the PC industry into the television business. The nine Sony TV factories worldwide had been compressed to four in March this year. Its factories in Mexico and Slovakia were sold to the Hon Hai Group, while the two Spanish factories were sold to local companies.
However, this "light asset" measure did not bring immediate results. At least the huge losses that occurred in fiscal 2010 showed the problem. In fact, Sony predicted at the beginning of fiscal 2010 that its television business in fiscal year 2010-2011 would lose money and shipments would reach 25 million units. However, in January of this year, Ishida Ichita admitted that this goal has been difficult to achieve.
Panel sleepy
Sony, like China's color TV companies, also suffered from the pain of the panel. Sony told this reporter that “the structural adjustments made by the company have gradually shown effects, and the cost of production materials based on panel procurement has been declining. China, etc. Demand for emerging markets continues to grow, and Sony will provide a more rational product model portfolio for emerging market characteristics and strive to realize the profitability of the LCD TV business as soon as possible."
This explanation also reflects, to some extent, the obstacles faced by Sony's TV business. In fact, Kato Yu blames the loss of the TV business on the impact of panel price changes. According to its statement, in the first half of fiscal year 2010, the number of large-scale panels purchased by Sony did not reach the planned amount. In the second half, Sony could not use the panel. Falling prices advantage.
Sony China further explained that, "After all, Sony's losses in the era of LCD TVs are similar to those of Chinese companies, because the upper panel is subject to people."
The reporter learned that Samsung Electronics and other companies have invested in large-size LCD panels since 2001, and now Samsung has 6 LCD panel production lines more than 7 generations, while LG also has more than 6 generations of production lines, and Sony At first it was still indulging in the glory of the Trinidad era.
Until April 2004, Sony and Samsung Electronics signed a joint venture agreement to establish S-LCD LCD panel company, Sony has a 50% stake. It was not until 2005 that Sony began to use S-LCD 7-generation line panels. By July 2007, Sony began to use 8th-generation line panels.
However, because S-LCD's core technology is owned by Samsung, and the three high-generation lines of S-LCD can only guarantee to Sony's monthly production capacity of 90,000 pieces, this can only guarantee 50% of the needs of Sony TV, in order to solve the gap in the panel. Sony has been purchasing from AUO, Chi Mei, etc., and from 2011 it has even begun to resume buying panels from LGD.
Fluctuations in LCD panel prices are beyond Sony’s control. Sony’s sources revealed that “As panel prices rose before May 2010, Sony did not purchase enough panels to cause supply shortages. In June, panel prices fell for 11 consecutive months. Sony Although a large number of panels were purchased, the panel continued to depreciate and Sony suffered a drop in price."
It is worth noting that Sony's plan to participate in Sharp's 10th-generation line has also been postponed because of the financial crisis, and its lack of upstream in the LCD TV era has become the biggest pain.
Xie Qinyi, vice president of market research firm Display search Greater China, told this reporter that “like the color TV companies in mainland China, Sony is also suffering from the panel, and due to the large shipments of LCD TVs and the appreciation of the yen, etc. Its loss is even greater."
Some experts pointed out that in the era of CRT TVs, Sony has greatly reduced its management costs through its globally and relatively complete supply chain management system. However, in the era of LCD TVs, due to the lack of panel control, it cannot establish its own independent supply chain system in various regions of the world. .
3D, Internet TV self-help
We hope to use technology upgrade opportunities to catch up with opponents. Ishida Kazuhisa, who took office in 2009, not only promoted a light asset strategy at Sony, outsourced more television production to Hon Hai, etc. to reduce costs, but also hoped to use new technologies to develop R&D. Make up for the weakness of the panel.
According to reports, he conducts weekly telephone conversations with retailers to collect sales data from Sony TV. This is a common practice in the PC industry, allowing manufacturers to adjust production plans based on the latest sales data.
At the same time, Sony began to accelerate the pace of product development and adjust the direction of R&D. Sony insiders revealed that Sony has reduced the number of hardware and software platforms in order to accelerate the development of television products. Ishida Kazuhisa even asked engineers to reduce their attention to picture quality because most users do not see the difference.
In the ordinary LCD TV field is difficult to surpass Samsung, Sony hopes to use technology upgrade opportunities to catch up with opponents, including from the CCFL backlight to the LED backlight upgrade, from 2D to 3D upgrades, from digital TV to Internet TV upgrades.
At present, Sony is beginning to focus on 3D and Google TV. Sony and other Japanese TV companies are leading South Korean companies such as Samsung in the research and development of 3D technology. Sony is also using 3D for LCD TVs, PS3s, HD cameras, and HD digital cameras. Connected with Blu-ray technology, using the overall concept of "3D World" to hit the market. Sony's strategy has played a certain role. Currently, Sony and Samsung are leading the global 3D TV shipments, and even more than 45% in the Chinese and Japanese markets.
Sony also took the lead in launching the first TV with Google Internet TV platform. This product allows users to search for web videos and watch live webcasts. Sony insiders revealed that Sony's Google TV took only 13 months from planning to launch, which is half of the conventional development cycle for similar products. Obviously, Sony hopes to grab the commanding heights of Internet TV by speeding up R&D. But these are all facing pressure from competitors' rapid follow-up.
Fenghua Jade Motor Co., Ltd. , http://www.telephone-enclosure.com