Fallout: The Financial Crisis

Why Sony’s reporting a $1 billion loss

Scott Tong May 14, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

Why Sony’s reporting a $1 billion loss

Scott Tong May 14, 2009
HTML EMBED:
COPY

TEXT OF STORY

BILL RADKE: Sony makes those thin, flat-screen TVs. But this next number looks bad, in any resolution: One billion dollars. Today the Japanese company said it lost that much money in the last fiscal year. From Shanghai, here’s Marketplace’s Scott Tong.


SCOTT TONG: It’s Sony’s first annual loss since 1995. But its products have already been losing ground for years. The one-time portable music king got bonked on the head by Apple’s iPod. Then, Sony’s Playstation 3 undersold Nintendo’s Wii by half. Now its TV sales stand second to Samsung.

Sony blames its losses on the global economy. And a stronger yen, which jacks up the price of every Japanese export. The company thinks next year will get worse — as in losses of more than a billion dollars.

CEO Howard Stringer has ordered cost-cutting. Sony’s losing 16,000 workers, several factories, and it may outsource TV-making to China. But even if all that works seamlessly, some think the real issue is innovation: What Sony’s missing is a must-have product.

In Shanghai, I’m Scott Tong for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.