theSuede wrote:
I usually don't argue about religion, but face the facts:
Their reported profit margin is 30%
Where did you see that?
Their last reported annual results that I could find (for the year ending March'11) was EBIT $42m and sales of $249m, therefore margin was 17%
But this is the whole company, I was talking about the camera division which had sales of $200m and profit of $31m therefore margin of 15%
And that was EBIT ie earnings before interest + tax (another $5m combined). Their audited financial report is in the link below, you can find a breakdown by segment on page 53:
http://www.corporate.leica-camera.com/assets/file/download.php?filename=cp_file_5998.pdf

So they did make a small profit last year with the M9/X1, but I was talking about the years before that:

you can cross-check the numbers on their website
http://www.corporate.leica-camera.com/investor_relations/annual_reports/2012/index.html

Seriously I dont know how you came up with 150% margin before (margin higher than sales ) This is a mathematical impossibility unless you find a way to have negative costs ie the assembly workers paying you for the privilege of working for you
Maybe we're not talking about the same thing...

As for the hidden profits and weird mortgages, to be honest it sounds like a bit of a conspiracy theory to me, these are audited financial statements of a listed company and they look pretty straight forward. Interest was a couple of mil.

On the other hand I agree with everything you said about capitalism

theSuede wrote:
Leica margins (just the BOM and assembly, no R&D included) is just under 150%. Basically - what you're doing if you buy a 5000USD Leica product is to push 2000$ down an already pretty wealthy investor's pocket. Amongst larger companies, only Apple can sucker their customers for larger margins.

Sony has been trying to aggressively expand in to many areas (and failed in some...), and they have lost the TV division. This is what causes their current situation, which may be dire from an investors PoV, but not very so from a realistic long term PoV.

The total stupidity of capitalism often staggers me. While I agree on the rationales of it, the people in power behind it are often so incompetent in long term planning that they should be assigned places in some asylum. There's a very good reason why the US real estate crash cost the secondary victim (US treasury) about 700 billion dollars per year, and everybody actually knew that reason already long before the crash. They just chose to look the other way, since they were making so much money.
Overestimation of value crashes hard, but that doesn't seem to bother many big-time players on the field, even though the crashes in the hundred-billion class come every twenty years or so, always with the same cyclic period, and always with the same chain of events leading up to it. Next to come for USA will be the treasury bonds, and honestly there's not scratch to do about it. It will "just happen". A few years after that, it will be stock market again. That anyone is surprised (this is now the fifth time this cycle reiterates) surprises me.

Some places in eastern Asia will start stepping over the front edge of the same type of bubble very soon, many of them two, or even three times harder than USA.

Sony's share price sinks to a 32 year low.

http://www.theverge.com/2012/11/14/3647536/sony-convertible-bond-image-sensor-investment

Kotaku article on Sony:

http://kotaku.com/5960411/how-sony-is-turning-into-a-ghost-in-japan-and-around-the-world

carstenw wrote:
Kotaku article on Sony:

http://kotaku.com/5960411/how-sony-is-turning-into-a-ghost-in-japan-and-around-the-world

Wow....amazing article. Glad I dont work for Sony after reading that.

carstenw wrote:
Just start a social site with fields to fill in all this information and people will give it to you for free

Exactly. 100%.

I don't know if anyone else has posted this link:

http://www.guardian.co.uk/business/2012/nov/12/japan-economy-recession?INTCMP=SRCH

It appears the entire Japanese economy is in trouble and entering a recession. Not surprising that major companies like Sony and Panasonic are feeling the pinch.

To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

calvininjax wrote:


To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

That's what they said about Kodak.

rattymouse wrote:
calvininjax wrote:


To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

That's what they said about Kodak.


Apples and oranges me owd chuck.

rattymouse wrote:
calvininjax wrote:
To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

That's what they said about Kodak.


Disagree. Kodak was a case of dead men walking for a long time and many put money on that bet. That said, Sony's stock chart isn't one to inspire confidence on the long side.

Specifically looking at the photography business, Sony isn't following in Kodak's footsteps. For now that's all that matters to me if I'm going to buy a Sony product.

michaelwatkins wrote:
rattymouse wrote:
calvininjax wrote:
To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

That's what they said about Kodak.


Disagree. Kodak was a case of dead men walking for a long time and many put money on that bet. That said, Sony's stock chart isn't one to inspire confidence on the long side.

Specifically looking at the photography business, Sony isn't following in Kodak's footsteps. For now that's all that matters to me if I'm going to buy a Sony product.


Did you read the article at all?

"For some people in Japan, Sony is already dead."

"In contrast to the Nakayama store, which is almost a Sony graveyard, at the Sony Building, located in Ginza—once the most expensive and luxurious area in Tokyo—the Sony Show Rooms are immaculate and have almost five floors of space. The irony is that almost every floor is empty on a Friday afternoon."

"We stopped dealing in Sony products a decade ago."

"The graveyard of Sony products is impressive. Beta-max was killed by the VHS. The Memory Stick was killed by USB memory. The Walkman was killed by the iPod. The common MP3 format killed Sony's DRM heavy ATRAC format. "

“In recent years the imaging division has been one of Sony’s top performers, and was identified by CEO Kazuo Hirai as one of the company’s pillars for future growth when he took the reins in April.

The proliferation of camera phones and corresponding drop in point and shoot sales have hurt Sony’s Cyber-shot line, but it remains a strong competitor in other arenas with its NEX line of mirrorless cameras, its more DSLR-like Alpha line, its professional cinema gear, and its expanding medical imaging business.

During the Q&A following Sony’s recent Q2 earnings call, CEO Hirai reinforced the benefits of the division’s diversified nature, pointing out that the company makes money both from the cameras it manufacturers and the sensors it produces for competitors’ products, including smartphone cameras.”

Do readers seriously think Sony Imaging will melt into a hole in the ground, leaving them with no spare arts or firmware upgrades for their cameras? lol.

From my understanding of the ills of the Japanese economy, the ageing population and concomitant blowouts in health and welfare costs combine with labour force shortfalls to present quite a challenge. That said, they have been the doldrums since 1992. Debt / GDP is massive, but they are not Robinson Crusoe there either. And they face few problems raising funds to cover it, unlike some other economies.

Current unemployment is 4.2%. And they are not rioting in the streets and throwing eggs at German officials and calling them 'that' term, nor is UE 25%, they are not largely mendicants most of whom see tax liabilities as a strange and novel notion...

calvininjax wrote:
I don't know if anyone else has posted this link:

http://www.guardian.co.uk/business/2012/nov/12/japan-economy-recession?INTCMP=SRCH

It appears the entire Japanese economy is in trouble and entering a recession. Not surprising that major companies like Sony and Panasonic are feeling the pinch.

To borrow from Mark Twain, reports of Sony's death are greatly exaggerated.

The fact that the Japanese economy is not doing well doesn't mean that every Japanese company is doing just fine. Sony is not.

rattymouse wrote:
Did you read the article at all?


Sure I did. It's a piece designed to sell the author's opinion.

If it were written to report objectively on the state of Sony, it'd at least mention how much revenue the company generates and what areas of the business are strong. It would also cast a critical eye at other companies engaged in the same lines of businesses. Instead the author single mindedly assails the company.

I'm not saying there are no problems at Sony, but if I'm going to form an opinion as to the viability of a company I like to look at the full picture.

That Kotaku article started well, lost direction, made many mistakes, and eventually petered out – a bit like Sony itself, perhaps. The bit about Kageyama TVs was new to me (and interesting).

But I’m no closer to understanding why Japanese electronics giants are having such a hard time these days. If their prices are too high, was that not also the case twenty years ago, at the height of their dominance? They won on quality; why can’t they still win on quality? Or is quality – in the old-fashioned sense of reliability, picture quality, audio quality, and so on – no longer in demand?

I suppose the pertinent comparisons are with Apple and Samsung.

Apple I think I understand: its products are innovative, functional, beautiful, and durable – in other words, high quality. But Steve Jobs was reportedly obsessed with Sony products in the seventies. In the eighties he turned against Sony’s black, industrial-looking design aesthetic, in favour of a clean, Bauhaus-inspired, ‘high-tech’ look, and this proved highly prescient. Jonathan Ive put things in MoMA. Opinion-makers fell under Apple’s design spell, and people who didn’t understand design fell for the hype. The products largely worked well, and everyone likes that. Easy.

Samsung/Korea (one and the same?) is totally different. The philosophy seems to be to have a finger in every pie, make ‘good enough’ stuff with a high ratio of in-house tech, pile ’em high and sell ’em cheap. Behind the scenes there is a lot of research into core tech like batteries, LCD panels, semiconductors, etc. Also dodgy slush funds, nationalist subsidies, nepotism, etc. How can this messy mishmash beat the Japanese at their own game?

Some of those questions are answered in the article. Twenty years ago, the Koreans and Chinese couldn't really compete at all on an equal footing, due to a lack of technology. Sony bootstrapped Samsung when they laid off or forced into early retirement a number of top engineers. And Sharp is showing that at least within Japan, they can still compete on quality. But due to disparity in price, they cannot compete on a global scale. Korea has lower manufacturing costs.

I think the Samsung characterisation is not accurate. They are one of the top brands in the world, and there is lots of stuff out there which is lower quality. Samsung is the new Sony, competing on price, and quality (and a borrowed design aesthetic, both from Apple and Sony) at the same time, albeit not at the same level of quality as Sony used to offer, or Apple offers today. All of the problems you describe about Samsung's finances also describe these Japanese companies, but they have been doing it for longer and are deeper in the hole.

Spyro, I think TheSuede has a Leica vendetta
The plastic 35/2 on the RX1 costs more than an all-metal hand-assembled (in Germany) exotic glass-laden 50/1.4 summilux asph... yup, pass me the cool-aid.

I thought the bit about Samsung hiring Japanese engineers, as if only Japanese engineers would do, a bit too convenient. It suited the ‘woe is us but we’re still the best’ narrative the Japanese seem to prefer.

I’m sure Samsung did hire loads of Japanese engineers, but it also hired engineering expertise from all over the world. I personally know a French battery researcher who went to Korea nearly ten years ago to do blue-skies research for Samsung – I mean esoteric lab stuff. He was provided with a good salary, personal assistance to find a nice apartment, free this and that: in short, all the usual (and slightly distasteful) trappings of imported foreigners in Asia. (He eventually married a Korean and moved to Japan, ironically.)

Regardless of how Samsung acquired engineering expertise, clearly it did. I don’t doubt for a moment that Samsung and Korea have invested hugely in core tech. They do this very well.

What I don’t understand is how Samsung turned its deep and broad technology portfolio into a global megabrand. For a long time it had more junk products than serviceable ones (that’s changed, but there are still loads of mediocre Samsung fax machines, etc.), it’s marketing has always been dire and still is today, and it makes everything from TVs to ships to washing machines.

Although Samsung is often compared to Sony, I don’t really see the similarities. Sony specialised in consumer electronics, created a new culture around personal electronics, created a new corporate design language that everyone copied (like Apple today), and frequently wowed the world with new feats of miniaturisation (also like Apple, though we’re harder to impress today).

Samsung makes a cheaper TV, a plastic iPhone with a bigger screen, a washing machine with steam, a hundred varieties of forgettable vacuum cleaners, camcorders, printers, Blu-ray players, etc., etc. Many of them are good products, but they’re not aspirational products. Teenagers don’t listen to punk on their Samsung under the bed covers. Old men don’t swear by their jewel-like Samsung shortwave receiver. That was Sony’s turf.

It’s interesting to observe, but slightly baffling. I don’t blame Sony for not knowing what to do. Can you imagine competing with Apple and Samsung? That’s some rock and hard place!

Am I the only one who has never used a Sony product?
... or maybe I have and I dont know it
but I do get loads of phones and tablets from work ("test units" ) and my galaxy note replaced them all, phones and tablets alike, apple, HTC, motorola and Nokia. I found the perfect match for my big hands and buggy pants

TVs... I dont even remember what mine is, some monstrosity I paid 2 or 3 grand for. Must be Korean

Panasonic takes drastic measures. Killing 10.000 jobs and selling quite some of it's factories. http://www.reuters.com/article/2012/11/14/us-panasonic-cfo-idUSBRE8AD0D120121114