01.27.99
Harsh price wars between electronics manufacturers, sluggish global sales, a strong yen, and economic woes in emerging markets took its toll on Sony's profits in the last quarter of 1998. It doesn't appear that there's a light at the end of the tunnel, either. Japanese economic analysts are predicting bad business conditions through 1999 and into the year 2000.

Masayoshi Morimoto, Senior Vice President, reported that sales of color TVs, Walkmans, and stereos were bad in Russia, Asia, and Latin America. The European and U.S. competition cutting prices on cellular phones, computer displays, and CD-ROM drives by as much as 50 percent was another blow to profits. The only good seller for Sony, it seems, is the PlayStation. Sales were so strong, in fact, that the PlayStation is one of the few items which Sony expects increased sales of.

Sony cannot live by PlayStation alone, however. Cost cutting measures, such as job cuts, pay reductions, and moving research and development overseas, are all inevitable. The overall effect of these changes has yet to be seen, but I will keep readers posted on future developments.