Fitch: Sony More Likely to Sink Than Panasonic
November 24, 2012 8:40 PM
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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.
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11/25/2012 8:11:38 AM
Do I feel sorry for Sony? Hell no! Years ago I spent over $400.00 for an external DVD player/writer and it was defective from day one. It had read/write errors with my using the software that came with it. I shipped the unit four times to California and it never got fixed. They said it had nothing wrong with it. I got stuck with it. Needless to say,
I will never buy another Sony product again.
It's just a matter of time when poor service catches up to a company and it looks like it's happening.
11/25/2012 11:18:58 AM
That's been slowly happening for years, I knew it would bite them in the ass when I worked for them seeing how they treat the customers as if they are a bunch of liars.
11/26/2012 10:51:12 AM
Ditto here. I bought a Sony VAIO mp3 player... around 2004?.. and they mothballed it within 3 months of my purchase. ZERO support from Sony after they canned it.
11/28/2012 11:32:10 AM
Hmm. My parents have/had a bunch of Sony equipment from the 80s and 90s, and I'm just dismayed that they haven't died yet.
1998 - Sony DVD Player. Still there. Outlasted two other DVD players.
1997 - 20" Triniton. Was working fine when they gave it away last year.
1996 - 32" Triniton. Still going strong. Would be a waste to replace it with a flat panel, but nobody wants to buy a 16 yr old, 250 lbs TV. Nobody even wants us to donate it...
1993 - Stereo/CD Changer. I want to get my parents something nicer, but again, it's not dying.
1985 - 27" Triniton. Was working fine three years ago when it was given away. Couldn't even connect a cable box directly to it anymore.
I guess Sony painted themselves into a corner - they built bulletproof electronics through the 90s, and nobody ever had to replace anything. They built cheaper products in the 00s, and everyone started jumping ship...
"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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