A higher U.S. dollar hurt Sony's results, but the root cause was continued weakness in divisions the firm is still unable to turn around. The results in the company's consumer electronics division were especially alarming. The units include TV and digital cameras. Revenue dropped 27 percent to just over $8 billion and the division had an operating loss of $20 million. Sony competes with lower-cost producers, especially in Korea, and it has not been able to come out with hit products to command premium prices. The success of the Walkman is a distant memory.
Revenue for the unit that includes the PS3 fell 37 percent to $2.6 billion and the segment lost $414 million. The PS3 still trails the Microsoft (MSFT) Xbox 360 and Nintendo Wii in global unit sales. Sony has not been able to add features, cut costs, or come up with games exclusive to the platform to gain market share. That does not appear likely to change.
It has always been a mystery as to why Sony owns a movie studio, but in the last quarter, its results were helpful. The unit produced sales of $1.8 billion, up slightly, and operating income of $19 million.
Until Sony returns to producing big hit products, its results are going to be poor and its competitive position in consumer electronics is going to continue to deteriorate.
Douglas A. McIntyre is an editor at 24/7 Wall St.