Sharp reported a net loss of 138.4 billion yen ($1.76 billion) on sales of 458.6 billion yen. It told analysts that it expected to remain in the red for the rest of the year, and that it will cut 5,000 jobs by March. These are the first layoffs the company has announced since 1950, and news reports say executives are taking salary cuts of between 20 percent and 50 percent.
Osaka-based Sharp has fallen on especially hard times as a result of its narrower focus on TVs, from which it derives about three-fifths of its revenues. In March, it struck a deal to sell a 10 per cent stake in itself for [76 billion yen] to Hon Hai, the Taiwanese contract manufacturer of everything from Apple iPods to Sony PlayStation video-game consoles.
Sony said its sales rose slightly from a year earlier to 1,515.2 billion yen ($19,180 million). However, it reported a net loss of 24.6 billion yen ($313 million), versus the 15.5 billion yen deficit it reported for the second quarter of last year.
Like Panasonic and Toshiba, Sharp and Sony expect business to be challenging for the rest of the year. Sharp reported weakness in its TV, LCD, and solar panel business. Sony cited its TV line. The yen's strength is also hurting Japanese companies, because customers are opting for lower-cost panels and related products from Korea and Taiwan.
Yes, Sharp i really hurting. They still continue to make great products, but I thnk price-wise they are getting hammered. Worse, it looks like new partner Foxconn is re-evaluating its relationship with Sharp. Foxconn is said the be lowering the amount of its investment at a lower price becuase Sharp is hurting so much. I'd expect to see more layoffs...I'm not really sure what new products will turn things around.
I will be curious to see how bad Sharp is affected in the next 3 to 6 quarters. Sharp has always made a high quality television, but I think they might have put too much focus on that business. Considering most households have multiple televisions, most of which have been upgraded due to lower costs, it is hard to believe the executives at Sharp feel that they can continue to drive business through a majority of television sales.
Definitely Japanese companies are struggling to get of the losses. I think Koreans are definitely giving them hard competition and even beating them easily. We have already seen mergers in Japan LCD business and I believe this will continue to happen in another segments also.
I think Japanese companies are far from being out of the game, but these results are pretty awful. I think Japan has resisted outsourcing in favor of vertical integration because companies are better able to control and manage their technology. But if Japan can't compete on price, such as in the LCD business, they are going to lose both market share and reputation. (Look how quickly Foxconn renegotiated with Sharp.) Innovation also requires cash, which Sharp and Sony clearly are struggling with. I wonder if we might see more ventures such as the government-backed LCD business that free up the innovators to do more...well, innovation.
Lately Japanese vendors (auto, electroincs and others) are more aggressive. They beat Korean vendors in thier own game of low price products with very low margins. But Japanese product may be more sound technically. It may take some time. But Japanese organization will be doing very good.
@anandvy< i agree with you on that. I feel alot of comsumers will be disappointed is Sony just go down like that without a fight. All around me, I still have people that will not buy any electronics if its not Sony.
but one is Japan hasn't embraced outsourcing as much as the ROW and as a result has not benefited from the efficiencies that can ge gained.
@Barbara, I always felt Japanese dont outsource their work because they themselves are so efficient hard working people. Do you think they have learnt a lesson now ? Will they now start outsourcing their work ?
Looks at Toyota. They have large profit and will become world's largest auto manufacturer. Similalry, Sony and Sharp will have bright future.
@_hm, I am not sure if we can compare auto industry with electronics industry. Electronics industry is more competitive becase you have players like Apple, google etc which are always trying to innovate new products. So the only way Sony can overcome this competition from other companies is to start innovating.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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