[quote] Oh, how the mighty heroes have fallen![/quote]
2 Samuel 1:27
According to a report from Reuters, Moody’s Investor Service has cut Sony Corp’s long-term debt rating because of reducing demand for its consumer electronics.
According to the report:
[quote] The downgrade to Baa3 from Baa2 follows a one-notch cut by Moody’s in October, which also said its outlook on the firm remained negative. Another cut would lower its rating to junk, forcing some funds to offload its debt and curtailing the company’s ability to raise money in credit markets. Sony, in the quarter ended Sept 30, posted a small operating profit, after a loss a year ago, helped by the sale of a chemicals business that offset weak demand for its TVs. The company is also mulling the sale of its New York headquarters, which would also provide a boost to income.
The company maintained its profit outlook for the full business year, but expects to sell fewer of its hand-held PSP and Vita consoles. It also trimmed forecasts for sales of TVs and compact digital cameras.
In the past several months Sony has spent $1.8 billion to buy companies ranging from medical equipment to cloud gaming.[/quote]
The Moody report highlighted that, “Without robust restructuring in the coming 12-18 months, Sony’s non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable.”
As a big Apple fan, I’m not here to gloat about this very sad news. I always believe that Apple and Sony have a lot common in terms of their business strategy. I’ve cover this in more detail in my piece on the The Verge forum – Samsung: Here is Why Apple Should Be Afraid.
In this piece, I’ve pointed out that Apple could suffer the same fate if they become complacent.
Source: Reuters
