Last month, Sony announced a loss of more than $2 billion and canceled its dividends for the current fiscal year.

This is the first time Sony has canceled its dividend payment, and the CEO apologized for Sony’s poor performance. He blamed the fiscal shortfall on a strategy to center its core business on the smartphone segment, where revenue never reached its forecast. Sony’s restructuring plan calls for layoffs within the mobile device division. The CEO did not elaborate about the restructuring plans.

Sony was the flagship company in the global consumer electronics market during the second half of the 20th Century. It developed many innovative electronics technologies, and has created new markets. Its product lines included the transistor radio, Walkman, VCR, video camera, Trinitron color TV, video games and more. Sony remained at the top because of its name recognition and consumers were happy to pay more its products. The Sony name had a perception of quality, durability, and cutting-edge technology. Over the past 15 years however, Sony lost its competitive advantage and is now one among many in a crowded electronics market.

Sony’s management team were aware of a down turn in business, and tried to improve cash flow by selling several manufacturing divisions to EMS companies. This did cut costs in the short term; however, this action did nothing to create new innovative products. Sony decided to enter into a joint venture with Ericsson, a Swedish telecommunication giant, in order to expand its cellular phone business. The joint venture did not make a big splash, and Sony tried to acquire Apple Computer during the '90s. Both companies had a business relationship because Sony manufactured personal computers for Apple during that time. One could speculate on the financial position of Sony today if it did acquire Apple. I think Apple would not be as successful as it is now had Sony acquired it.

A close friend of mine named Kaz worked for Sony as a design engineer in one of the manufacturing division. His career blossomed and he was tapped on the shoulder to become the planning manager of a CEO support team because of his aggressiveness. He proved to be a valuable asset to Sony, and retired from the company about 10 years ago. He told me the reason he retired was there was no more exciting things happening with Sony. Unfortunately, Kaz passed away a few years ago. He loved Sony, and was expecting the lights to go off in his old company during his lifetime. Fortunately for Kaz he did not see it.

How can Sony be saved? Sony needs a strong and innovative leader such as a Steve Jobs from Apple or a Carlos Ghosn from Nissan. I don’t think its too late for Sony.

Dominique K. Numakura, This email address is being protected from spambots. You need JavaScript enabled to view it.
DKN Research, www.dknresearchllc.com

DKN Research Newsletter #1428, October 5, 2014 (English Edition) Micro Electronics & Packaging

For the archives, visit dknresearchllc.com/DKNRArchive/Newsletter/Newsletter.html

Headlines of the Week

1. Showa Denko expanded manufacturing capacity of SiC epitaxial wafers to 1000 150mm wafers per month for the increasing demands of power semiconductors.

2. Dow Corning Toray commercialized two new high-reliability silicone resins for the encapsulation of the next-generation LED devices.

3. Murata developed cheerleading robots. Several 36 cm high robots make good balance on balls keeping a distance among them.

4. Tokyo University developed a temperature bonding technology between OLEC and flexible circuits without glue. It can be easily removed after firing.

5. AIST developed a vapor phase synthesizing process for diamond wafer minimizing defects.

6. Toshiba started volume operation of Clean Room Farm Yokosuka modified from an electronics plant. It produces over three million vegetables per year.

7. Teijin developed a silicon ink paste “NanoGram Silicon Paste” for local back surface field type photovoltaic cell devices.

8. Tanaka Holdings codeveloped a charcoal filter “ACF401” for the recycling of palladium catalyst wastes with Kuraray.

9. Mitsui Chemical started commercial operation of the hybrid power generation plant in Aichi Prefecture of solar power (50MW) and wind power (6MW).

10. Marubun has started to import flexible color electronic paper display of E Ink from Taiwan.

11. Sharp unveiled three new high definition LCD TVs with an equivalent resolution and brightness as 4k TVs.