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Suddenly, Amazon Doesn't Love Its Moms AnymoreThings had been going well for Sony's shareholders after the appointment of Howard Stringer as the new CEO. But, then things started to fall apart, again.
Sony Corporation (ADR) (NYSE:SNE) makes the batteries for the laptops from companies like Dell, which as you know are being recalled due to overheating and fires. Sony is also being damaged by concerned that its new PlayStation 3 will launch late. To complicate the competitive landscape, Microsoft has been updating its XBox gaming system and upping its marketing spending. Sony's shares have dropped from about $53 in late April to $39 yesterday.
Under Mr. Stringer it would appear that little has improved, despite the initial optimism of his appointment. The recent bad news could also hurt the company financially, with the battery recall cost hitting as much as $500 million.
Sony is not longer viewed as the engineering powerhouse it once was, introducing innovative products virtually every year. That mantle seems to have passed to Apple Computer, Inc. (NASDAQ:AAPL).
With Sony on a spiral down, perhaps Apple will learn something about the road ahead.
Douglas McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
10-04-2006 @ 2:05PM
mlll said...
This happened to SONY long before Stringer. If you wanted a portable music device for decades it was a SONY. (walkman anyone?) So how did they ever let Apple steal their bread and butter. I can't help wonder if the Sony music and films divisions aren't behind all this lag in R&D. The recording industry has fought mp3 for years. Sounds like it's time for a spin-off strategy...
10-04-2006 @ 5:29PM
Morris said...
Having been a product manager for the very first MP3 product while all the while looking askance for Sony and others, we now find that Sony indeed seems to have lost their entrepreneurial spirits somewhere along the way. After the battery issue is long put to bed, Stringer is going to have to pull a rabbit out of his meager hat or retire. The problem is that this company is hog-tied culturally and it will take a miracle to get them to loosen up. Top management at the board and division level are quintisentially Japanese and need their jobs. It was surprising to see Springer appointed and it must have taken dental drills by his sponsors to get his approval. I hope they can succeed in future; we need competition & great products.
10-05-2006 @ 2:19AM
TJP said...
Sony has gotten away from its bread and butter, personal digital entertainment. The company forgot about '90s when Sony was the BEST of breed product. They could have maintained their dominant market status with highly attractive personal products that screamed "Buy Me."
Apple has taken that initiative, and Microsoft seems to be following along too. The digital marketplace is probably too competitive, but Sony could focus its energies on LCD TVs. Yes, the lcd tv will be the hottest product for the next 3 years. Why? Because the FCC is requiring that all televisions made after 07 must be digitally equipped. In other words, NO MORE TUBE SETS.
SHOW ME THE LCDs!