The good news is that Sony expects to be in the black for its
current fiscal year. The bad news is that it probably won’t be able to
achieve its goal of returning its electronics business to profitability.
posted a consolidated net loss of 40.1 billion yen for the
April-September half, compared to a 42.4 billion yen loss during the
same period a year ago. Helped by selling off its chemical products
business, the company’s operating profit jumped about 40 percent in the second
quarter, but this wasn’t enough to offset increased tax burdens.
encouraging to see the company’s losses from its TV
operations are shrinking this year, and Sony’s financial services are
generating a better-than-expected profits.
But the company is hardly out of the woods.
The biggest problem is that Sony has shown no evidence that newly “refocused areas” -- digital cameras and imaging technology, video games and mobile devices – outlined earlier this year by Sony’s new chief Kazuo Hirai are putting the company back onto a growth trajectory.
By contrast, sales of game consoles and digital cameras continue to shrink. "A return to the black [in the electronics business] will be difficult" in the current year, Sony acknowledged.
Sharp losing Apple's trust?
It’s clear that Sharp’s future hinges on its success on small- to medium-size screens for mobile phones and tablets, not large-screen TVs. It’s been speculated that Sharp’s survival depends on its ability to ramp up production of panels for Apple’s iPhones and iPad. The company may have already screwed that up, according to a story that appeared in Nikkei, Japan’s economic journal.
Apple reportedly started looking for a new panel supplier in 2009. Apple’s search was triggered by Samsung’s launch of its Galaxy line of smartphones, which soured Apple’s relationship with its Korean rival.
Apple has always had a multiple-sourcing strategy for displays. But without Samsung as its key display supplier, Apple was eager to find another leading LCD vendor.
Apple liked what it saw in Sharp's panel technologies, including its IGZO (indium-gallium-zinc oxide) and in-cell technologies, which integrate touch sensors directly into LCD panels.
In December 2010, Apple decided to go so far as to help Sharp expand its capacity to manufacture panels for smartphones and tablets by providing Sharp with 100 billion yen it needed to remodel its flagship panel factory in Kameyama. The fab was originally built to produce large-screen TV displays.
Despite Apple’s support, Sharp, was unable to manufacture enough panels at the cost Apple demanded, according to the Nikkei report.
Apple did adopt Sharp's IGZO panel technology for the new iPad unveiled in March, but Sharp reportedly missed the delivery date of new panels by nearly half a year..
Further, mass production of in-cell panels for Apple's iPhone 5 only started at Sharp's Kameyama plant on the same day that Apple announced plans to release a new iPhone on Sept. 12. Missing the delivery date is bad enough. But to do so with the critical products Sharp is betting its future on -- for its most important customer – borders on suicidal.
Sharp harbored hopes of becoming a leader in solar energy technology. But that plan also went out the window when Sharp ended production of photovoltaic modules in the U.S. and Europe to concentrate production in Japan. This retrenchment was a part of a turnaround plan the company had to submit to secure bank loans late September.