Unpopular predictions for Sony's 2009

[NJ5]

alephnull said:

 

There are two things that I think would help make your estimate more accurate.

1) The semi-conductor industry (much like oil) prices everything in dollars and hence Sony's losses per console is probably going to depend more on the ratio between the euro and the dollar. The recent near-run on the pound might also significantly affect the numbers if only because of how rapidly it has deteriorated. I should note that I would expect this to increase the predicted losses, but im not certain.

2) The bottom has fallen out of the electronics industry as you noted, however this has also had the effect on putting massive downward pressure on producers further up the supply chain lowering Sony's input costs.

Thanks for the interesting comments :)

1- That could be right, the reason why I didn't base my estimates on that is that I don't have any good data on it, or even an indication from Sony's declarations that it matters a lot. The pound as you said is just a disaster for any company selling a lot in UK (fortunately it's not as big a territory as the US or the € zone).

2- Frankly I didn't use the falling electronics demand much for my (rather conservative IMO) predictions regarding losses. I regarded it more as a safety cushion in case their currency hedging is not that well portrayed by the CFO's statements. What you mention should also be a mitigating factor though.