theprof00 said:
Are you still talking? Look, your entire argument is completely off the mark. I'll bold them and respond in kind since you seem to think that casual dismissal means you're right. As a favor to you, I will point out what you don't seem to understand. Hopefully, this will help you reevaluate the situation and come up with more solid reasoning for your argument. 1. You do need to source your numbers because you don't know how much of a loss it is for the company. Instead, you automatically picked the most impactual losses. I can appreciate a "worst-case scenario" viewpoint, but if you're going to argue objectively, at least use middle of the line conjectures. While you are right to assume that these employees were indeed productive, Sony departments are extremely bloated with a lot of unnecessary fat to be trimmed. They make far too many models of television sets, all with very similar prices and options, and probably have far too many people manufacturing these sets. If I'm a corn supplier, and I supply for market, ready-consumption, feed, fuel, etc etc. I might only want to have a couple options. Perhaps, at the store, I'll have frozen, fresh kernel, and canned, and maybe a mash. What Sony does with tvs is have frozen, frozen semi-large, frozen large, frozen top grade, frozen semi-large top grade, frozen bright yellow, frozen large bright yellow, frozen orange, frozen large orange, kernels, pop corn, frozen popcorn, frozen popcorn kernels, frozen un cooked kernels, frozen roasted kernels etc etc etc. And all of them are within 10 cents of each other. This contributes to brand confusion since their products are all labeled S, V, W, XBR,etc etc etc. You can read more about it below, otherwise, I'd recommend skipping it and moving on to number 2. This is a list of tv models: Sony LCD TV Models
Discontinued Sony LCD TV Models
These are all the models that have been active in the last couple years. The main problem with the outlook on tvs is that people think that they can get away without having a warranty. So, when people look at Sony, they see a reliable system and do not get a warranty on it, thinking the brand name will cover it. While Sony does tend to use only the highest grade parts, there will always be failures. On the other end of the argument, Samsung uses cheaper parts, extends the warranty, and so users have better value out of the system. You wrap this entire thing together and you see that Sony can afford to make fewer models of tv, increase the scale of manufacturing of single models which drives down costs from having fewer manufacturing lines open and keeping those single lines open, increasing efficiency. (Like with computers, assembly plants often use much more energy when initially warming up and starting than when they are running, as well as decreasing the lifetime). So, even using your "worst-case scenario", Sony can and should decrease the number of assembly lines they have open for the 30 or so lcds they make, thereby allowing them to cut jobs and increase efficiency. In this way, they can also remove many positions that are related including drivers, operations managers, assembly workers, security, etc etc. The point is, laying off workers is not so damaging as you are making it out to be.
2. This is a prime example of you straying from the point. I didn't say ONLY SONY TVS LOSE MONEY. I said Sony tvs are the one thing holding Sony from profitability. It would be wise for you to make these distinctions in future arguments. Yes Sony Ericsson loses money. It is a good full generation behind other companies. However, it is not as big a business as tvs are. Being as it is, its failures do not incredibly impact the company. It's definitely operating in the red, but not to the point where the red can't be changed to rose.Looking at their phones, there is a huge amount of growth possible. Sony phones are nearly a full generation behind current trends whereas sony tvs are cutting edge. What this means is that Sony doesn't even have to invest much in terms of research and development, because all they need to do is perform *roughly* as well as current phones. On the TV side, they have pretty much been the pioneers for the apst twenty years, in cooperation with other companies. They are constantly investing in new types of tvs, wrappable screens, holo screens, 360 degree screens etc etc etc. Meanwhile (and if you research the korean tv companies), a lot of the popular tv companies are simply making cheap products based on current technology, and are very successful in doing so. Similarly, Sony is poised to do the same with phones. They can simply aim to the present market, and move up along with the people doing the research. Lastly, keep in mind thattheir latest move was to BUY OUT Ericcsson (however you f*ggin spell it) and take it over completely. Where meanwhile they were selling factories and marketshare to Sammy. A company doesn't simply decide to invest in failing opportunities...and if you think them capable of being so idiotic, they'd be proving you wrong in their sale of tv business. At least in the phones business, they see the possibility for growth and profit.
3. Playstation is a "pillar" for Sony. They've used PS to push their brand and televisions and techologies for ages, and they will continue to do so. They took a chance in using it to push Bluray, and Bluray has indeed grown a good amount. Nothing compared to when DVD was introduced, but they've "upgraded" the earnings they receive from their own entertainment division in doing so. DVDs were getting to the low teen range in pricing for new releases, and they found a way to charge 20+ again, and sometimes 30. They allowed themselves a way to resell movies they already made, etc etc. In the tech world where prices drop and drop and drop, it is important to find ways to keep them level and continue selling when revenues are sinking (which is typical). It's like video cards and video games. Video Cards exist almost solely on the backs of the games that run on them. When developers find that it costs too much to fully maximize the graphics detail, they will discontinue improving the graphics, and thereby video cards will stop upgrading. Instead, what they did is add things like shaders and aliasing. These are secondary roles that the graphics cards can do that doesn't burden the developer much, but still forces you to buy new cards. Furthermore, for the new playstation, Sony now has a cheap 100-200GB platform for data storage, and at such a good degree of manufacturing that they can produce cost effectively. What does Microsoft have in development? What is Nintendo using? (probably dvd9) I can't argue with you that they lost a lot of money in putting the BR in the ps3, and they might not make those losses back, but in the end, it will likely be in the ps4 negating R&D, assisted in keeping Sony entertainment revenue strong, assisted in sound system sales, tv sales, etc etc. BR has had a pretty big impact, and without it, Sony might have been in a similar position now, but without the proprietary tech. The question Sony wants to ask themselves now is, do they continue R&D'ing cutting edge products, or do they buy rights and produce. For the time being, I'd say they want to stick with low investment level products, ie, buying rights. They will push BR for another 5-10 years, and follow whatever comes out afterward.
4. TVs are not a very profitable market. The msot important thing is your overhead, which Samsung clearly handles more efficiently. I mean, a lot of Bravias are even made in Japan! Can you imagine? A company manufacturing in a first world nation trying to compete with manufacturing in a third world nation. Of course, both assemble in Mexico and both make parts in malaysia, etc etc, but, even making JUST ONE model in Japan easily inflates the cost a good 40-50$ per tv. That is inefficient. It's not hard to imagine what happened. Just look at the world economy. When the economy was constantly rising, so was Sony. Now that the economy receded, the bargain manufacturer is growing. I mean, you could almost boil down this entire argument to that one statement. This economy is a very anti-Sony environment. A lot of the problem is that Sony kept pushing in expectation of the economy getting better, instead of downsizing and cutting costs and manufacturing capabilities like others did. With teh resurgence of the economy that we are seeing (hopefully), then perhaps Sony will be getting better, but right now, like kowen said, Sony is a company designed for a massive amount of production, and this is not the economy for that. It is an economy for "cheap products that perform nearly as good in some aspects, and in some aspects better". |
You ask if I'm still talking, and yet you post walls of text that barely relate to the points I make.
1) You seem to be inventing numbers that I used. I didn't mention numbers about the impact of cutting the employees. I merely stated that cutting 10,000 employees comes at a price, in addition to the savings related to a reduced workforce. Yes, Sony can cut down their number of TV models and streamline their production to reduce the cost of TV's per model. That was never disputed.
2) "I didn't say ONLY SONY TVS LOSE MONEY. I said Sony tvs are the one thing holding Sony from profitability. It would be wise for you to make these distinctions in future arguments... Yes Sony Ericsson loses money." I didn't realize a division that loses money didn't hold back a company from profitability. My bad.
3) Noone's arguing that PlayStation isn't a Sony pillar. But its current success came at the cost of incredibly massive losses early in the generation. The point is Sony has a track record of making expensive decisions which don't pan out as well as they'd like in the long-term.
4) To paraphrase what you said - Sony isn't geared for the current economy, and has many eggs in an unprofitable basket. Sony is competing with people who produce equivalent products at a lower cost. Sony is rife with inefficiency.
Does this give Sony areas to tighten up in order to make themselves profitable? Yes. But it can't happen overnight. Sony is claiming this massive turnaround will result in profit within the year. So despite currently running deep in the red, and adding on the nearly $1 Billion they anticipate in restructuring costs, they expect to make this turnaround fast enough to be in the black for the next fiscal year. Right now, they've got a blueprint for areas to tighten up, but it's not a switch they flip. They don't hand over the $926 million in estimated restructuring costs and overnight, they're a sleeker, profitable company. They need to modify production, redirect assets, redesign products, etc, then they need sales to increase accordingly.
You act as if I am foolish to question the direction of Sony, but so far the only thing Sony has given is words. Let's look at facts. 12 years ago, Sony had a market cap over $100 Billion, and were profitable. They have steadily lost money (and thus shareholder confidence) in the last several years, to the point where their current Market Cap is $16.8 Billion. Kaz' announcement hasn't caused any sustained rise in stock price, which shows that the people who could bank some money on Sony's turnaround have chosen not to. Even your defense of Sony paints the picture of a lumbering, ineffective company not entirely prepared to fight on it's competitor's turf. Hopefully for Sony's sake they can change that.
