A revamped Sony Corporation is in the works following a recent sale of its chemical business. Although investors are split whether the company can deliver profit in the near future, the recent move is seen as a good one for the ailing Japanese giant.
The company’s value had seen continuous decline, suffering a 16 percent drop since June this year. Sony is valued under $12 billion.
After losing 1.6 billion yen last year, Sony is ready to announce that its back on track with an operating profit of 33.8 billion yen or US $424.7 million during the second quarter this year. Sony products include PlayStation gaming consoles, Vaio laptops, and Bravia TV sets.
Sony sold its chemical business to the state-owned Development Bank of Japan to get back the company on its feet. The deal earned 58 billion yen for the Japanese firm. Its planning to sell other assets this year. Sony led the electronics market in the 1980s by introducing the Walkman portable players. It is closing the Shinagawa Technology Center in Tokyo. There are rumors that the 37-story Sony Tower in New York will be next, according to media reports.
The Japanese group is also planning to cut 10,000 jobs by March next year translating to 6 percent of its total world workforce. The move would allow the company to save up to 30 billion yen.
The new Sony CEO, Kazuo Hirai, revealed his plan to reinvigorate the company by focusing on gaming, mobile services and digital imaging, as well as medical devices. It TV business has become a losing venture following a loss of $9 billion over the past 8 years. It has agreed to become the biggest shareholder of Olympus Corp, a big company specializing in medical endoscopes, by paying 50 billion yen last September.
Yoshiharu Izumi, a JP Morgan analyst said in a report: “The areas in which Sony is continuing to focus are of course high-risk, high-return markets. Although we expect (full-year) margin improvement in the electronics segment, we think it’s too early to appraise a sustained recovery.”
Sony is hit on multiple fronts today as it deals with a strong onslaught from its rivals led by Apple Inc and Samsung Electronics. Overall world economy is not helping either, while the Japanese yen’s appreciation against the dollar continues.
Another big Sony rival, Panasonic Corp, has also revealed that it will lose about $10 billion during the current business year following its efforts of getting rid of risky assets, losing TV business, and other non-profit generating consumer products.
Sony’s handset division is also not selling as expected as its Xperia smartphones have slid by about a fifth in July-September quarter to below 8 million units. Analysts expect Sony will be shipping about 34.4 million handsets next year, more or less the same figure Samsung is shipping every month.
As the world slowly shifts to mobile phones for gaming, Hirai also forecast that the yearly sales of its portable Vita and PSP consoles will only be hitting around 12 million from previously expected 16 million devices.