This is pretty disturbing. I wonder what is causing the difficulties?

http://arstechnica.com/business/2012/11/sonys-financial-rating-falls-to-just-above-junk/

I hope that neither company is hit hard by this, just as the mirrorless market is getting up to speed.

I wonder what is causing the difficulties?

It has nothing to do with their technical assets, nor their market positions in terms of market share and short term profitability of the companies. Just like so many other multinationals these companies have a bad financial structure underneath their daily business. Debts and debt financing are the problem. Hedge funds use their positions to put pressure and even when they have a minor position in the governance of a company they use all the power they have to to get their share. It's one of the bad sides and troublesome issue of current capitalism.

Consumer electronics is not an easy business if people would rather buy somebody else's products, or you make LCD TVs where you lose money no matter what, or when cameras and gaming are consolidating to mobile devices that you don't make.

I doubt Sony is going to be hanging up the "going out of business" sign any time soon, but one wonders how they plan to reposition their company to be relevant for the next 10-20 years. Their highest margins are on image sensors, but I don't think that will be enough to carry the rest of the weight.

Sony have been lagging behind in many fields. No wonder.

Yikes! Sounds really bad!
Looks like Thrice(Dan) made a good decision to leave them and go work for Leica .
Hope I can get a RX1 before they go bankrupt!

carstenw wrote:
This is pretty disturbing. I wonder what is causing the difficulties?


Samsung is eating their lunch in all the profitable segments of their businesses. Sony has been bleeding red ink for several years now, with no letup in sight.

I didn't realise that Sony was doing badly across the board. I thought they were winning some, losing some... They tend to put out two or three generations of mediocre products, and then land a perfect one which just hits the little X in the bullseye. In cameras it is a bit different, you see them slowly working their way towards the sweet spot.

But Panasonic is the one which really surprised me, I guess. I thought they were solid. I wonder if I should hurry up and buy the 12-35 and 35-100 before they disappear?

Not really news. Sony has been in really bad shape for many years now. REALLY bad. They burnt through a few CEOs with no change. Their cash cows have been lost to Apple and Samsung and they have no real consumer success products now of any stature. Sony continues to be in real bad shape.

I just find it so surprising that they are doing poorly across the board. They used to have winners in every segment.

molson wrote:
carstenw wrote:
This is pretty disturbing. I wonder what is causing the difficulties?


Samsung is eating their lunch in all the profitable segments of their businesses. Sony has been bleeding red ink for several years now, with no letup in sight.

The surprising thing I found about Samsung is how diversified they are. That's Sony's issue - movies/music can only be a crutch for so long.

Which companies (CaNikon aside) are doing well nowadays?

Which companies are doing:

1) Like, really well.
2) Making ends meet.
3) Losing some, but hanging in there.
4) Bleeding profusely / circling the drain.
5) Bled dry/bankrupt, just don't know it yet.

From the sounds of things, both Panasonic and Sony are in 4), heading towards 5).

I don't know how Samsung is doing in general, I guess at least 2), although their cameras are only selling modestly, AFAIK.

Olympus is probably in 3) at this point. Pentax/Ricoh? I don't know, maybe also 3)? I can't think of any in 1), apart from Apple and the iPhone camera. Fujifilm is probably in 3). Most of the medium format companies must be in 3) as well. Leica might be in between 1) and 2).

Expect to see no new cameras or business activity from them; and their entire corporation will cease to exist on April 1. Like it did the last five years.

With not the slightest chance that another company will take over the better prospects of their business, and those Minolta engineers will be looking for work yet again. We can kiss goodbye to the sensor design and fab that seems to power the entire camera industry with 1-2 exceptions.

So from our omniscient business acumen here at FM, let's agree - they are most definitely finished this time! You know it makes sense...unless you a bit about Japan Inc. that is.

So what is it we should [know] about Japan Inc., wise guy

Well, Sony and Olympus are in business together. I think Olympus still have some money left with their medical equipment business. Olympus camera I too think is at 3).

I have a hard time picturing Sony out of the picture. Funny as that came out. Panasonic is huge so that would be shocking as well. If they were to keel over I think that they would be cut up and served to the market and go on in one way or another. The brands are house hold names so should they cease to exist it would be kind of weird. With Sony it would be like Coca Cola just disappeared.

Ricoh is huge in the copying industry and it seems that the camera division is just an appendix to it and could be cut off without leaving much more than a tiny scar. However with the acquisition of Pentax it seems they are in it to gain market shares so there is more at risk for them than ever before.

Interesting times. But, the market is very diverse and unfortunately it seems like the mass market in the digital world nowadays seem to happy with whatever they churn out as long as it is in a neat little package. But, as huge as the market is, they can't keep churning out stuff that isn't supposed to last and that is easily replaceable by the next "big thing" six months down the line.

Smart phones are absolutely massacring compact sales, part of Sony's bread & butter. The camera industry is well over due for some contraction and in the next year, someone is going to exit. It looked like Olympus might be the first to go, but that seems not likely now. Ricoh is a major contender. They may put all their eggs in Pentax, although Pentax isnt exactly health either.

Something has to give soon. The world economy is not strong enough now and is getting weaker, not better.

Looks like RX1 is to become a legend after all! Might be a good buy - if only I trusted in the durability of modern manufacturing a bit more.

Old news but at the right price and terms lots of buyers for Sony broken up into logical business units.

Dave

davenfl wrote:
Old news but at the right price and terms lots of buyers for Sony broken up into logical business units.

Dave

Yes but there are debts, massive debts, that come with any purchase.

This could be bad for Sonys component clients like Nikon. Without Sony sensors Nikon would be stuck. Also Sony money is keeping Olympus afloat.