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Panasonic and Sony On Course for Staggering Annual Losses

Panasonic and Sony On Course for Record Annual Losses

It is going to be rough year for the Japanese HDTV giants. Panasonic recently announced a hefty annual net loss of US$10.2 billion up to March, an estimated figure which eclipsed Sony's forecast of US$2.9 billion for the same period. This throws Panasonic into the same league as Sony and Sharp, who are both struggling to revive their struggling TV businesses as well. Unlike Sony's CEO Howard Stringer who'll be giving up his seat for Kazuo Hirai come April, President Fumio Ohtsubo will retain his appointment as Panasonic's President despite the company's slump into the red zone. However, he did apologize for the dismal figures. "I feel the responsibility for the huge amount," he said, as quoted in Reuter's report. Ohtsubo also told reporters during a press conference in Tokyo that Panasonic would be reforming their profit structure to achieve a 'V-shaped' performance in the next business year.

Collectively, Panasonic, Sony and Sharp Corp are expected to lose up to US$17 billion this year. Their losses are attributed mainly to the weak demand for televisions, a resolute yen, and fierce competition from South Korean rival, Samsung Electronics. Also mentioned in the Reuter's article is Panasonic's obvious handicap in the market, given that most Smart TVs have the potential to link up with in-house mobile devices like tablets and smartphones. On top of these woes, Panasonic has to cope with the flagging Sanyo Electronics as well, which the company procured back in 2009.

In the news report filed by Big Picture Big Sound, Hirai mentioned that Sony will focus on areas such as video games, mobile phones, and digital cameras for the year ahead. Panasonic, on the other hand, would adopt a different approach by cutting a total of 17,000 jobs before March is over. They've also trimmed their forecast for the number of flat-screen TVs the company would sell by a million to 18 million sets. In light of the fiscal turmoil, one can't help but wonder if the Japanese are losing the HDTV war rather prematurely to the Koreans. Samsung is expecting the global television market to grow around 7 to 8 percent in 2012, and has already made plans to double that rate with a sales target of 50 million TV sets.

Source: Reuters (via Yahoo), Big Picture Big Sound, Reuters

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