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Sony's TV lineup fueled strong gains that outpaced a weakening dollar in the company's latest earnings report  (Source: AntBlog)

Sales of Sony's PSP dropped 50 percent on a yearly quarter-to-quarter basis.  (Source: PSP Blog)
Growth in LCD television sector is offset by currency concerns

Sony Corporation, Japan's largest electronics exporter and the fifth largest media conglomerate in the world, reported mixed news when it came to its fiscal second quarter earnings report on Friday.

The earnings were highlighted by some impressive gains.  Most notably, net profit (net revenue) rose from ¥26.3B (approximately $326M USD) to ¥31.1B (approximately $386M USD).  Sales rose from ¥1.6612T (approximately $20.6B USD) to ¥1.7332T (approximately $21.5B USD).

The sales gains were driven by large gains in sales of televisions, which jumped from 3.3 million units in Q2 2009 to 4.9 million this quarter.  Sales of PCs and the PS3 also rose.  The biggest loser was the PSP, whose sales nearly dropped in half on a quarterly year-to-year basis.  The PSP is obviously being hurt by strong competition from Nintendo and Apple (makers of the iPhone).

The report heads into less than optimistic territory, as well, discussing the company's problems with the American dollar.  Due to the U.S. Federal Reserve's anti-recessionary tactics inflation in the U.S. is rising and the dollar is weakening.

Sony reports a loss of ¥23.4B to "Foreign Exchange Impact" in its earnings report.  The Euro, the standard currency of the European Union (France, Germany, etc.) also was a subject of Sony's scrutiny.  It fell even farther than a dollar, dropping 14.7 percent versus a 7.5 percent drop for the dollar.

Political and corporate leaders in America and Europe have been voicing an opposing criticism.  They have vocally argued that certain nations, such as Japan, are artificially preventing their currency from appreciating.

Who's right in this debate is largely a question of whose rhetoric you choose to embrace.  It is clear to most, though, that there is a growing rift between the world's economic superpowers in terms of policy that could have a serious detrimental impact on the fragile recovering economy.

Sony appears to be just one of many companies that's getting dragged down in the process.  That casts a cloud over what otherwise would be a very rosy earnings report and puts pressure on the core TV/PS3 business units to continue to post gains.



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title...
By omnicronx on 10/29/10, Rating: 0
RE: title...
By barjebus on 10/29/2010 3:32:20 PM , Rating: 3
Their sales are generating revenue that comes in as foreign currency...can't pay your factory workers, local suppliers, taxes, and salaries in foreign currency, it needs to be in yen. So yes, they do have to convert that foreign currency at a less than attractive rate these days.

Japan is primarily an exporter...a weak yen benefits them as it means that every foreign sale means more money locally.


RE: title...
By omnicronx on 10/29/2010 4:54:58 PM , Rating: 2
No, they probably won't.

They have more than enough assets in Japan to do everything you've noted. Only if they were in financial trouble would they be forced to convert foreign currency.

I can pretty much guarantee that is not the case.

It may not even make sense regardless, chances are foreign currencies will rebound vs the yen, and as such borrowing money if they truly needed it would make far more sense.(which once again, I doubt they do)


RE: title...
By barjebus on 10/29/2010 7:43:31 PM , Rating: 2
I can't see how this is the case (I may be ignorant of the facts though).

I see Sony as having healthy sales domestically, but there's no way (in my mind at least) that their local domestic sales are able to cover the salaries, manufacturing costs, component costs, and taxes without converting at least _some_ of their foreign sales into yen.

I'm from Canada and many of our companies here are hurt by the strong Canadian dollar. These companies (usually resource based, but some tech companies are hurt as well) are still making lots of money, but every sale they make is now less CDN $ in their pocket than in the past. Sure they retain some foreign currency reserves, and do have foreign expenses that can be spent on them, but it never balances out or is favourable.

Again though, I don't have Sony's sales numbers so I can't claim to be an authority on the subject.


RE: title...
By Reclaimer77 on 10/29/2010 6:56:24 PM , Rating: 3
So THAT'S why they think their flat screens, with the same exact guts in them, have to cost twice as much as a Vizio!!

Ah ha!! :P


RE: title...
By Hiawa23 on 10/29/2010 8:05:35 PM , Rating: 2
So THAT'S why they think their flat screens, with the same exact guts in them, have to cost twice as much as a Vizio!!

Ah ha!! :P


Does Sony own Vizio or something? I bought me a 1080p Vizio TV at Sams for $268, & was shocked how great the tv is given how much it cost, & now Vizio is all I buy. Does the Vizio brand have the same guts as the Sony branded sets?


RE: title...
By Reclaimer77 on 10/29/2010 10:25:04 PM , Rating: 2
Well by "guts" I meant in the general sense, not that the components are from the exact same manufacturer. But in the general sense, there's no difference between a Sony or a Vizio. Sony likes to bombard the consumer with a lot of techno-babble marketing speech that doesn't mean anything. At the end of the day you pay more for a Sony because, well, they're Sony and they think you're too stupid to know better.


RE: title...
By Noya on 10/31/2010 6:50:23 AM , Rating: 2
To clarify, there's only 2-3 companies that make all the LCD panels that are put into HDTV's. The only real difference is the exterior case and the video processing.


RE: title...
By EricMartello on 11/1/2010 6:26:01 AM , Rating: 2
Yes, and we all know that video processing hardly matters. Let's look at this another way:

Computer 1 and 2 both have identical monitors.

Computer 1 has the newest high-end Radeon GPU. (Sony)

Computer 2 has an Intel integrated GPU. (Vizio)

Billy wants to play the latest rehash of CoD...by your logic the game will look and play identically on both computers, because hey, they both have the same monitor, right?

No, not really. Even old games play like shit on an Intel GPU. the image quality of even a mid-range NVIDIA or AMD GPU will greatly surpass it and that's why you pay more.

Yes, the idiots who thing a $200 Vizio is the same as a more expensive Sony or Samsung model are also just coming off tube TVs and VCRs, marvelling at how DVDs are so much "sharper" and they see no reason to jump in the "HDTV bandwagon".


RE: title...
By kingius on 11/1/2010 8:31:23 AM , Rating: 2
I don't think the Vizio will be dropping frames to keep a consistant frame rate, hehe.

Your comparison would only work if you took two models of GPU that were very close together in performance.


RE: title...
By EricMartello on 11/1/2010 12:08:52 PM , Rating: 2
No, the point is that despite having similar (or even identical) LCD panels, the ASICs and software that presents the picture on that panel (of the TVs Vizio vs Sony) differs significantly, and therefore apparent differences in quality are visible.

Some of the differences that really show the difference between a shitty $200 "buy it for my grandma" flat panel vs a more expensive unit from Sony, Samsung or even Panasonic:

- Fast motion
- Smooth motion
- Dark scenes (black levels)
- color saturation
- even picture (edge to edge)
- SD upscaling (big if you still watch non-HD channels)
- Film processing (pulldown)

Of the above, smooth motion and black levels are usually the two main quality differentiators between cheap TVs and expensive TVs...and they are easy for even an untrained eye to spot when the two TVs are side-by-side. That's not to say you should shop solely by price, but there is more than marketing fluff separating a Vizio from a Sony.


RE: title...
By Flunk on 10/29/2010 9:08:40 PM , Rating: 3
It's not actually that the Yen in high, the Dollar is just very low. Against everything.


RE: title...
By BZDTemp on 11/1/2010 7:49:16 AM , Rating: 2
Exactly.

The only reasons it does not look like that for those not traveling outside the US is that oil is traded in US$ and that the goods coming in from China is being protected from that effect. If China was not artificially holding their currency down the US consumers would find everything suddenly got a lot more expensive.

The US is pretty much bankrupt and unless something significant is done it's heading for hyper inflation. Something which, among other things, will make OPEC leave the dollar as currency for oil trading and then the price of oil in the US will go through the roof further causing trouble for economy.


Crazy times
By BansheeX on 10/30/2010 5:45:23 AM , Rating: 2
This idea that a strong currency is bad for you is such Orwellian nonsense. You don't export for the sake of exporting, you export to get imports in return. If you can't find some place to get imports in return, BUY YOUR OWN STUFF. This isn't a global race to cut your own wrist to subsidize debtors. The dollar isn't just losing value, it's losing value relative to some other currency. So sell the products to the countries with appreciating currencies instead, including yourself. Or hell, just work less since your money can buy more than it used to. Anything is better than trashing your currency to maintain some pointless nominal figure.




RE: Crazy times
By Zingam on 10/31/2010 7:52:12 AM , Rating: 2
The worst thinking is that people need to buy anything for the sake of buying and supporting the economy.
Capitalist economy is a funny thing. It requires constant growth. But since planet Earth is a finite entity and the population is finite too - the growth cannot be infinite.
BTW what about the resources? Are they infinite too?

The way the world has functioned for the last century will be coming to an end sooner or later. It's just impossible to supply all these billions of people with the goods and craps that the US society has enjoyed during that time.

Also there is a trend. The western capitalist societies have very low birth rates. Has capitalism and the consumerist society eaten the children and mad the man and women infertile? The capitalist system works for now because it is constantly fed with a fresh flesh from poorer third world countries (emigrants) and it is obvious taht it is not able to sustain itself. It is like a meat grinder: to function it needs a constant supply of fresh meat.

It's quite obvious that sooner or later will destroy the planet and exhaust its resources before we fall into another age of darkness. How long is it going to take? 2-3-5 decades? We shall see.

Maybe reaching for the stars and spreading the surplus population beyond the Earth's orbit is the only was to salvation???

Blah, that's too much of a scifi


RE: Crazy times
By EricMartello on 11/1/2010 6:35:04 AM , Rating: 2
Yeah man, we needed a global warming tangent...nice segue. Humans are evil. Kill them all and the planet will thrive.


Slightly off-topic here...
By bkslopper on 10/30/2010 9:47:08 AM , Rating: 1
This is what happens when we (US) print too much money. Dollar goes to $#!+. I feel worse voting for Obama '08 than Bush '00. I skipped '04, was too busy playing Neverwinter Nights to notice. =P




RE: Slightly off-topic here...
By Zaranthos on 10/30/2010 2:00:41 PM , Rating: 3
You mean money doesn't really grow on trees? We'll just keep printing more, what could go wrong? ;-)

For all the "blame the Bush administration" crap that has been going on I don't see the improvement promised by Obama. After almost 2 years of nearly unlimited power they've managed to spend trillions and make things worse. We kicked one set of bums out and got another set that was worse. They all better wise up.


RE: Slightly off-topic here...
By Zingam on 10/31/2010 8:23:23 AM , Rating: 2
Money don't grow on trees but they are made of trees :D


This seems strange
By MrTeal on 10/29/2010 3:31:05 PM , Rating: 4
quote:
Political and corporate leaders in America and Europe have been voicing an opposing criticism. They have vocally argued that certain nations, such as Japan, are artificially preventing their currency from appreciating.


I thought the Yen was very strong compared to the dollar, so much so that they are trying to use fiscal policy to rein it back in. Japan is one of the most vocal critics of China and their practice of buying foreign currency to keep the yuan artificially low.




Yuck
By Spivonious on 10/29/2010 4:35:48 PM , Rating: 2
How does anyone watch a TV with a picture like that? The colors are boosted so much it looks like the picture was painted on.




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