Sony Sales slump

Sony cell phone

Photo courtesy of Sony

Sony Sales Slump
| published Sept. 18, 2014 |

By Thursday Review staff


The technology and entertainment giant Sony has been a fixture for savvy investors for decades—many decades. In fact, the Japanese manufacturer has paid a dividend to its stockholders every year since 1958.

Over that half century of business, Sony has faced tough competition and sometimes unforgiving market shifts. Its competitors have included Panasonic, Yamaha, Samsung, and a dozen major U.S. companies, and its most serious challenges have included making quick adaptations to sometimes unpredictable changes in consumer demands and behaviors. And sometimes, Sony has had to face a combination of both forces (think of the struggles and eventual demise of Betamax in the long battles with the VHS format).

But Sony is struggling more than ever these days. This week’s trading in Tokyo sent Sony’s value to its lowest point in three years amid continuing concerns about the company’s declining revenue. Now, Sony says it will be unable to pay dividends for the first time since 1958.

Sony has been hurt by a worldwide decline in demand for its full-sized electronic gadgets and devices. The company has seen a substantial decline in sales of smartphones, and over the last few years its sales of traditional products—televisions, monitors, stereo equipment, speakers and cameras, even professional audio and video hardware—have sagged in direct proportion to the rise of smaller, nimbler products and fully digital platforms.

Competitors in the TV market, like Sanyo, Samsung, LG and others, have greatly cut into Sony’s share of the market. Sony has also fallen far behind in the smartphone market, now dominated worldwide by Apple and Samsung, and has also fallen even behind the two biggest Chinese phone manufacturers, Huawei and Lenovo.

As a result, Sony plans to shift its emphasis toward computer games, game consoles, and especially mobile devices and apps in the hope that it can regain some of its lost market share. Sony intends to beef up options for its popular PlayStation devices.

In the meantime, because of losses of roughly 2.7 billion yen in the first quarter of 2014, Sony has announced it will lay off about 1000 workers from its smartphone division.

Related Thursday Review articles:

Are Mobile Games Killing the Console?; Isaac Fink; Thursday Review Media; July 30, 2014.

Apple Versus Samsung: A Global Battle; Thursday Review Archives; March 18, 2014.