Sony dips below 1,000 yen for 1st time since 1980

Sony's stock price fell below 1,000 yen Monday for the first time since 1980 as global markets slide but also a symptom of its decline since huge success with the Walkman three decades ago. Battered by competition from Apple Inc. and Samsung Electronics Co., Sony has lost money for four
straight years — and for eight years in its core television business.A strong yen, which erodes overseas income, and natural disasters at home and in Thailand, a key manufacturing hub, have added to its woes.

Sony's shares dipped to 990 yen before recovering slightly in trading Monday on the Tokyo Stock Exchange. The Nikkei 225 stock average was down 2 percent after U.S. hiring slowed sharply in May.The company said it was first time that its stock price had traded below 1,000 yen since August 1980 — the year after it introduced the iconic Walkman portable cassette player to the world in 1979.

The stock had peaked at 16,950 yen in March 2000.Sony, whose businesses run from digital cameras and personal computers to PlayStation game consoles and movies such as "Bad Teacher," last month reported a record annual loss of 457 billion yen ($5.7 billion) for the year through March 2012.

The company is aiming for a comeback under Kazuo Hirai, appointed president earlier this year, who has headed the gaming division and built his career in the U.S. Sony forecast a return to profit for the fiscal year through March 2013 at 30 billion yen ($375 million), banking on the growing smartphone and tablet businesses.

Sony also plans to cut 10,000 jobs, or about 6 percent of its global work force.Widely admired in the 1980s as an innovative power, Sony fell behind when digital music players and flat TVs became hits. Its gadgets have lost popularity as consumers flock to products from Apple such as the iPhone and iPod.

It's also lost out in the TV market to South Korea's Samsung and other Asian competitors. Despite losses in that division, Hirai remains committed to TVs, and promised to cut costs to turn a profit in the division in the next two years.Sony also plans to seek new growth in emerging markets such as India and Mexico.In 2010, Sony stopped Japanese production of its Walkman, which sold 220 million units worldwide.

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New Sony CEO to keep charge of troubled TV operations

Tokyo: Sony Corp CEO Kazuo Hirai signaled his determination to turn around the group's ailing TV business by keeping direct charge of the division, as the Japanese brand fights to regain ground against rivals such as Apple.

Hirai, who formally takes over as chief executive from Howard Stringer next week, inherits a company that - like much of corporate Japan - has been outgunned in recent years by rivals like Apple and Samsung Electronics.

The maker of Bravia televisions and Vaio laptops expects a 220 billion yen ($2.7 billion) net loss for the year to this month, a fourth straight year of losses, and due in large part to a TV business that has not been able to keep up with nimbler and cheaper rivals.

Sony said Hirai would head a new home entertainment division, which includes TVs and replaces the consumer products and services group that he had led.

"The TV business is Sony's main business and (its recovery) is an absolute condition that must be met for the firm to recover its performance," said Keita Wakabayashi, an analyst at Mito Securities. "That's why it will be placed directly under (Hirai's) control, and means he has to take care of the most important issue."

Sony hopes Hirai, credited with reviving the PlayStation game business through aggressive cost-cutting, can work similar magic with a TV business that has lost more than $11 billion over eight financial years.

Sony will also form a new unit to oversee its medical business, which it has described as a growth area.

"The market is big ... but industrial electronics makers like Hitachi and Toshiba are already in this area so it's not like Sony is advancing into a free territory," said Mito's Wakabayashi. "Compared to this, it's much more important to improve the TV business."

Corporate plight
In many ways, Sony's woes illustrate the plight of a once-mighty corporate Japan hobbled by the very system that made it the world's envy back in its 1980s heyday.

Japan's manufacturers have invested hugely in factories and equipment to carry out their traditional strength of in-house production, but are now grappling with plunging product prices and excess capacity in a rapidly shifting digital landscape.

TV makers Sony, Panasonic and Sharp expect to lose a combined $17 billion this year alone, also clobbered by a strong yen, weak demand and tough competition from the likes of Samsung Electronics.

Long Sony's biggest product category by sales, TVs were overtaken by other segments in October-December. TVs accounted for 13 per cent of overall sales in the quarter, down from 19 per cent a year earlier and trailing games (16 per cent) and combined sales from Sony Pictures and Sony Music (15 per cent), according to the company's latest financial statement.

Despite the Walkman creator's image as an electronics icon, its only profitable businesses this financial year have been in entertainment - Sony Pictures and Sony Music - and financial services.Sony has been scrapping production capacity for several months, moving closer to Apple's "asset-light" business model of keeping design and product development in-house and outsourcing manufacturing. 

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