Sony Trimming 10,000 Jobs..

[PHiL]

TOKYO - Sony Corp (NYSE:SNE - news). said Thursday it will cut about 10,000 jobs, close 11 plants and shrink or terminate 15 unprofitable operations in an ambitious restructuring bid to revive its stumbling electronics business....

http://news.yahoo.com/s/ap/20050922/ap_on_bi_ge/japan_sony

[General Zot]

I'm not terribly surprised. Sony today is like the Apple of yesterday, they do everything in house. It's to keep the quality at a very high level but it is also expensive as hell. They don't use other companies for MP3 chips, DVD chips, whatever. They design them all themselves. The problem with that is that over time the dedicated MP3 and DVD chip companies stay lean, hungry, and design ever better chips. So your competitors that use them are coming out with better products for cheaper and cheaper prices.

 

Kind of like Apple trying to compete with PCs where the PCs have Intel just designing CPUs, companies just designing RAM, video cards, etc. Eventually Apple just couldn't keep up with such a diverse and competitive alternative to their Macs.

 

I would expect that Sony is dropping a lot of the chip designers and going with 3rd party solutions heading forward. Sony will make it, I hope they can maintain the level of quality they deliver in electronics once they begin to outsource for parts.

[iainl]

The article mentions that two of their big steps are to (a) kill the entire Qualia range and ( put the emphasis on the new range of flat-panels they've co-developed with Samsung, so it sounds like you're right.

 

Though this just helps persuade me that making my next TV a Samsung is the right decision.