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  (Source: bestasiatravel.asia)
Panasonic will likely survive because it focuses on more than just consumer electronics

A credit rating agency said that Panasonic would likely survive longer than Sony after downgrading both electronics companies.

Credit rating agency Fitch recently lowered Panasonic's rating down two notches to BB, but cut Sony down three notches to BB minus. Other credit rating agencies have put them at the same level.

The reason for Fitch's credit ratings? It claims Panasonic has a "relatively stable consumer appliance business," such as refrigerators and washing machines, aside from just consumer electronics. Sony, on the other hand, is mainly depending on the extremely competitive consumer electronics market.

Right now, tech giants like Apple and Samsung have a strong hold on the electronics market, such as smartphones and tablets.

Sony's troubles largely stem from its failing TV business. It has seen eight straight years of quarterly losses, and last December, Sony decided to shake up its TV division by negotiating a buyout of its 50 percent manufacturing stake with Samsung in the LCD joint venture. It also split its TV division into three units consisting of sales of LCD TVs, outsourcing manufacturing to cheaper foreign facilities and developing future TVs.

To make matters worse, Sony reported a record annual loss of $5.7 billion USD in May 2012.

However, new Sony CEO Kazuo Hirai has been working to turn the company around since he took over in April 2012. In fact, he offered an entirely new plan for restructuring the company. A key idea behind the restructuring was to strengthen core businesses, including digital imaging, games and mobile. He also opted to take over the failing TV business, expand business in emerging markets, create new businesses and realign the business portfolio.

Just last month, Sony closed a factory in Japan and cut 2,000 jobs at its Tokyo headquarters.

While Hirai is trying to make Sony profitable again, Fitch said "most of their electronic business are loss making" and "appear to be overstretched."

Fitch said Panasonic, on the other hand, is focusing on areas other than consumer electronics like home appliances, lithium batteries, solar panels and automotive parts.

Source: Reuters





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