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Ogemaniac
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Re: What new platform?
Ogemaniac   8/2/2013 2:30:17 AM
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The taxpayers will also likely get stuck holding a bag, too, after the CE division declares bankrupcty and sticks the public with all sorts of pension, welfare, and other obligations one way or the other.

Splitting a company. throwing a vastly disproportionate share of the liabilities to one side, and then letting it fail is par for the "hedge fund" course.

 

Susan Rambo
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Negativity
Susan Rambo   8/2/2013 12:35:16 AM
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@Junko: Masaru Kato, reportedly said: "We were able to achieve adequate (first-quarter) results but I'm not necessarily optimistic about the future."

Why do you think Kato was publically unoptimistic? What purpose could it serve, other than to tell the truth?

junko.yoshida
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Blogger
Re: What new platform?
junko.yoshida   8/1/2013 10:13:58 PM
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Here's my rebuttal.

1. The CE hardware business is already a precarious business. Sure, you might want to see each business unit (hardware and software) to be independently successful. I understand. But if the oter part of your own company can help catapult the hardware biz, what's the harm in doing that? At least Sony could buy time to get the house in order before completely running out of money ( that's where Sharp is in today).

2. Who said that Sony is limiting distribution of its entertainment products to its hardware? Sony has never been that naive or short-sighted to think that as a successful strategy. The point of having both hardware and software under one roof is to understand what ticks sw biz ( or vice versa) or what makes sense to entertainment biz. It's unfortunate hat Sony was not able to pull off what Apple's Jobs did when it comes to the online music biz, but hopefully the Japanese company learned that lesson.

3. See my response above (answered in 1.)

4. Tom, let's not get carried away too much here. Honestly, I don't believe the activist's motive is so pure. Sure, Loeb might be able to make a bundle if his proposal is accepted. But the rest of the shareholders will be left holding the bag, because once a portion of Sony's entertainment biz is gone, much of the value of Sony Electronics will be also gone.

Tom Murphy
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Re: What new platform?
Tom Murphy   8/1/2013 9:51:20 PM
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True, Junko. But Jobs was also wise enough not to produce entertainment. He chose to broker it.  Even when he joined the Disney board, there was no talk of merging Apple and Disney.

Tom Murphy
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Blogger
Re: What new platform?
Tom Murphy   8/1/2013 9:44:35 PM
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I'll take that challenge, Junko.  I'm not always in favor of splitting companies, but here are four reasons I think it make sense:

1. The entertainment business is much riskier than electronics (really!), but it also has the potential of much greater short-term rewards in today's market.  But if you were going to "subsidize" the electronics business with proceeds from a hit movie, you leave the electronics division vulernable to a quick downturn when the next dud hits the theatres. That's no way to run a CE manufacturing business.

2. Sony can't limit distribution of its entertainment products to its own devices without undercutting the revenue of the entertainment products. What's the point of that? And what's the point of having both unless you could do that?

3. The electonics business should be able to stand and compete on its own -- plain and simple. Sony's a great and innovative company that can play against any company in the world when it comes to CE; it has proven that repeatedly. Separating it from the entertainment group will lead to more stability and push it to innovate.

4. Shareholders -- who own the company -- deserve a choice. If the company split, they could continue to own both, or sell one and hold the other.  That would make both divisions of Sony more valuable separately than they are together, which is probably what Loeb is thinking.

junko.yoshida
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Blogger
Re: What new platform?
junko.yoshida   8/1/2013 9:42:31 PM
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The fortune Apple created for its hardware business (iPod, etc) originates from Steve Job's successful efforts brokering a deal with the music industry. Without Job's understanding of the entertainment industry, Apple's new revenue streams for its hardware wouldn't have been created.

rick merritt
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Author
Re: What new platform?
rick merritt   8/1/2013 8:15:50 PM
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Apple and Amazon found opposite models of content and systems. Apple makes $ selling devices and for Amazon the Kindle is a loss leader for content sales.

Sony seems to be in a no-man's zone between the two where the content/device links are weak.

junko.yoshida
User Rank
Blogger
What new platform?
junko.yoshida   8/1/2013 7:29:16 PM
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Running both entertainment and hardware businesses together had been a dream long cherished by not just Akio Morita, co-founder of Sony, but by practically everyone in the CE business.

Many tried it but gave it up. Sony is the last man standing.

I just wonder, then, what new business models or platforms Sony can bring to the table to wow the consumer -- by leveraging its hardware + entertainment businesses.

Anyone cares to guess?

 

 

 

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