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I'm surprised to see it drop to junk so soon.

It's clear Fitch is predicting that Sony's traditional "core" business won't recover.

That is the TV/Stereo/Phone markets.

I can see why they'd suggest this. Right now Japanese manufacturers are stuck between a rock and a hard place. Cheap Korean products are beating them, but if they move production overseas they'll lose a vital part of the Japanese market just for a risk that the prices will be low enough to be competitive in the TV market.