Sony to hold restructuring meeting September 22

September 14, 2005

If you follow Sony at all, you have to know that they are scrambling to
gain market share and increase profitability. The electronics
giant that once held a top slot with the Walkman product line, cannot seem
to repeat the same magic with present product lines. This past year, we
have seen them take drastic action as well, such as cutting 20,000 workers from
it's ranks in an attempt to increase efficiency and lower operating
costs, along with structural moves crafted to streamline
operations. According to this report at ZDNet, the company is still in flux
though, as CEO Howard Stringer, president Ryoji Chubachi and chief
financial officer Nobuyuki Oneda are scheduled to meet in a couple weeks
and then later provide the public with details of a new
business plan called "Project Nippon". For an outside opinion of what could
be done to tighten the reins, let's read what the NPD study group has to
say:

Stephen Baker, an analyst at NPD Group, said some of
Sony's biggest problem areas--products such TVs--are also categories on
which the company needs to remain focused. And some of the low-visibility
categories--including portable music players (excluding the MP3 players),
clock radios and car stereos--include products on which Sony should be
making money, milking each category as the market for it gets smaller.

What's left over are the midtier categories, ones in which Sony has a
history and has a large but not dominant share. Logical cuts could be made
in a few of these categories, Baker noted.

"It is hard to imagine an all-encompassing Sony brand not participating
in the DVD market, home audio and speakers, digital cameras, digital
camcorders or even PCs," Baker said.

Baker suggests that Sony take a good, hard look at diminshing its
efforts on current DVD technologies and focus instead on future DVD
technologies such those that will use the Blu-ray recording standard. He
also said the company should take its desktop PCs out of the hands of
retailers and adopt a direct-sales model like the one used by
Dell.

Possibly, the proprietary nature of some of
Sony's personal products has had a hand in lack of acceptance in the
marketplace as well, at least for that segment of the business. For those of you
interested, you may read the entire article from
ZDNet here.

Source: ZDNet