Restoring the Sony Premium (SNE)

Have you noticed how much more price competitive Sony Corp's (SNE) electronics are these days? Martin Fackler of the New York Times takes a look at Sony's current restructuring and devotes a good portion of the article to the "Sony premium" or more correctly put, "restoring" the "Sony premium."

There is no doubt the Sony premium is shrinking and while that's unfortunate, it's inevitable. Given the strength of South Korean electronics firms and the foreseeable emergence of Chinese firms, Sony has to also compete more on price. However that's not saying Sony can't continue to develop and market high-end products which typically bring in the most premium.

Sony will certainly benefit in many ways from the box office success of The Da Vinci Code and its earnings releases after the PlayStation 3 is launched will look increasingly better.

I see Sony spinning off some of its successful finance units in the near future, as the article mentioned.

Sony's ordinary shares (Tokyo: 6758) closed Tuesday down 0.76% at 5,190 yen ($46.19).

Click here for Fackler's full-text article.

SNE 1-yr chart:

Comments

[Steven Towns:]

Also check out John Christy's take ("It’s the profit, stupid") on a related NYT article over the weekend. It's hard to argue the fundamental importance of boosting profit margins.

2006 May 30 10:01 AM