By Kim Yoo-chul
Is it Japanese people’s famous patience, or fear of a western CEO wreaking havoc on its unique system of management as seen in the case of Olympus?
Either way, Sony’s retention of Sir Howard Stringer appears to beg the question.
The Tokyo-based outfit forecasts a fourth consecutive annual loss in its fiscal year that ends in March.
Plus, Stringer’s future plan, based on an $8.4 billion ambitious strategy to boost phones and content, is also filled with questions starting with its viability.
Sony’s latest decision to terminate its partnership with Samsung in liquid crystal display (LCD) flat-screen production is throwing the knighted CEO’s ability to manage in to question.
According to some analysts, this action may mean not only lowering its dependence on TVs, its former mainstay business, but could also spell a general downgrade in its products because the termination of the partnership is aimed at using cheaper products.
Is it a cost-saving effort? Yes. Is it worth it at a time when its TV business has been gripped by a downward spiral? Maybe not.
``Stringer had been too upbeat about the outlook for its existing businesses. He was too late in making some key decisions that Sony should have implemented earlier,’’ said an industry executive, who is knowledgeable about Sony’s inner working. .
Stringer’s previous attempts to regain Sony’s glory _ it was the iconic consumer electronics company globally up until the early 2000s _ has failed to find a breakthrough.
During his six-year reign, his endeavors have met with mixed results _ only some of them have been successful. The firm’s bottom line is not a point he can be proud of.
Last year, Sony reported a $3.1 billion net loss, its biggest for 16 years, and that was a disaster for Stringer who earlier hoped for a $2 billion annual profit.
One of his dwindling aces in the hole is to buy out the stake held by Ericsson in the Sony-Ericsson handset joint venture, allowing the company to better integrate smartphones into its product lineup.
The deal is a massive $8.4 billion. In return for selling off Sony’s entire stake in an LCD joint venture with Samsung, Sony will get $934 million from Samsung, which will be used to pay for part of its Ericsson deal.
But still, there’s no firm guarantee that Stringer’s acquisition plan will fully materialize and help it turn around Japan’s top-tier consumer electronics company. Samsung and Apple are ahead of Sony. .
Last year, Sony saw a decline of 52 percent in sales from more than $100 billion in September 2000.
``For me, Stringer is trying to buy other firms with competitive technologies; but the chances are that his efforts will not work. Sony will not likely be a serious contender in ``Internet-enabled’’ consumer devices, said an official from a Korean electronics maker.
Maybe, but still, his strategies can delay Sony’s decline for some time.
Sony scrapped its plan to introduce its premium 3D TV set using LG Display’s cheaper film-patterned retarder (FPR) glass technology, sources said, pointing toward a choose-and-concentrate strategy. .
LG Display public relations office chief Gary Sohn declined to comment, while representatives for Sony’s Korea office weren’t available either.
Stringer with his top confidants is still insisting the company will not drop its television business citing vigorous pitches to cut manufacturing costs and expand outsourcing of panels.
Sony is planning to drive up its so-called ``four-screen strategy,’’ aiming to offer laptops that can bring in content from television or vice versa, tablets, TVs and smartphones.
``Sony will remain a company to produce design-focused `Sony Style’ products and that means Sony will also remain as a niche market player,’’ said the official.