The division has failed to generate any black ink in eight arduous years. CEO Howard Stringer told The Wall Street Journal that the status quo can't go on, saying that "every TV set we all make loses money." The mediocre conglomerate forecasts a loss north of $1 billion for the fiscal year on the heels of its loss-generating TV business.
Stringer described how the TV industry has devolved into an intensely competitive market as manufacturers raced to win market share. TVs are mostly commoditized, and rivals have little way to differentiate themselves from the next maker, taking pricing power out of the picture and giving all the bargaining power to consumers.
For the next generation of TV sets, Stringer said that there is "a tremendous amount of R&D going into a different kind of TV set" but opted not to delve deeper. While the phrase "different kind" is vague and mysterious enough to spark hope, Sony isn't the type of company known for reinventing the wheel -- unless you count continuous attempts to push proprietary memory formats.
He also acknowledged Apple's (NAS: AAPL) upcoming foray, having "no doubt" that Steve Jobs had something in the pipeline. Stringer naturally believes Sony is in a great position to revitalize the TV market.
The 3-D fad is essentially dead, but Smart TVs have some promising potential. Google (NAS: GOOG) and Apple are going to war, and Sony will probably side with Big G since it already offers an Internet TV powered by Google. Logitech (NAS: LOGI) has now officially killed the Google TV set-top box, the Revue, showing that Google needs to regroup its own strategy with soon-to-be subsidiary Motorola Mobility (NYS: MMI) .
Can Sony survive the coming sea change? Only time will tell whether it can distinguish itself from its current rivals, such as Panasonic (NYS: PC) , Samsung, and LG Display (NYS: LPL) , while trying to devise a "different kind" of TV and beat Apple to the punch.
It had better hurry, though, since Apple's set may see an introduction as early as 2012.
Add these TV players to your Watchlist to keep tabs on the coming TV war.
- Add Sony to My Watchlist.
- Add Apple to My Watchlist.
- Add Logitech International to My Watchlist.
- Add Google to My Watchlist.
At the time this article was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Logitech International, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Logitech International, creating a write covered call position in Logitech International, and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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