Wed, Aug 03, 2011 - Page 11 News List

Sony looking to overhaul lossmaking TV division

STRUGGLING TO COMPETE:Officials said everything from development to sales would be reviewed in a bid to boost margins, one day after the TV side got a new boss

Reuters, TOKYO

Sony Corp will pull together plans this month to restructure its lossmaking television business and even consider teaming up with other firms, a senior executive said this week, days after the company cut its full-year net profit forecast.

The maker of Bravia TVs and PlayStation games consoles is heading for its eighth straight year of losses in the TV business, as it struggles to compete with lower-cost Asian rivals such as Samsung Electronics Co. It warned last week that losses on TVs could widen this year.

Sony will review everything from development and production to sales in its TV division, a Sony spokeswoman quoted chief financial officer Masaru Kato as saying in an interview with the Nikkei Shimbun. The plans will be put into practice as soon as possible, Kato was quoted as saying.

Sony has already sold off TV factories in Spain, Slovakia and Mexico in the past few years and outsources much production to Taiwan’s Foxconn Technology Group (富士康).

Sony and Panasonic Corp have warned of weak TV sales, especially in the US and Europe, following Royal Philips Electronics NV and Corning Inc in highlighting sluggish demand.

Sony, once a symbol of Japan’s high-tech might, is struggling to come up with hit devices and improve profit margins as it faces tough competition from Samsung and Apple Inc.

This year, Sony put off plans to raise investment in an LCD TV panel joint venture with Japan’s Sharp Corp, while last week a newspaper report said Sony was also considering pulling out of its joint TV panel venture with Samsung, although both companies denied the story.

Last week, Sony reduced its annual sales forecast for televisions to 22 million sets from 27 million, and also replaced the head of the section overseeing television manufacturing.

Masashi Imamura, who formerly headed the Personal Imaging division, which oversees the successful camera division, took over as head of the TV business on Monday.

Like rival Panasonic, whose TV division is also lossmaking, Sony says it will focus on profits rather than increasing unit sales.

TAIWANESE PANELS

In related news, Taiwan’s LCD-TV panel manufacturers are expected to enjoy better business in the latter half of this year, thanks to the shift of orders to Taiwan from Japan, Digitimes Research said yesterday.

The research institute said the yen’s recent appreciation against the US dollar has forced Japanese LCD-TV panel makers to switch their orders as cost-saving measure.

China’s Oct. 1 National Day holiday, a long seven-day break, should also spark shopping sprees for LCD-TV panels, said Jessie Lin (林芬卉), a Digitimes Research analyst and project manager.

Lin forecasts that Taiwanese LCD-TV panel manufacturers will witness a quarterly increase of 15.6 percent in shipments third quarter over the same period last year.

In the fourth quarter, normally the high season for electronics merchandise, Taiwanese LCD-TV panel manufacturers’ shipments could soar 25.6 percent quarter-on-quarter, to a total of 17.2 million units.

Orders from Sony and Toshiba Corp should make up 70 percent of all orders directed from Japan to Taiwanese manufacturers this year, Lin said, while orders from Sharp could top 20 percent.

Additional reporting by CNA

This story has been viewed 3015 times.
TOP top