Sony to Manufacture PS3 in China to Ensure Supply (SNE)

| About: Sony Corporation (SNE)

The Jiji Press (Japanese language) reports Sony Corp (NYSE:SNE) announced yesterday that it will expand its manufacturing of the much anticipated PlayStation 3 next-generation game console to China. This is the first time a PlayStation will be manufactured outside of Japan for a new console launch and is an effort to ensure Sony can meet its goal of shipping 6 million units during the first five months following its November release.

China was said to be chosen for its low labor costs. It also makes sense given its close proximity to Japan.

PlayStation fans were pleased to finally learn at E3 the exact ship dates and specs of the PS3 but weren't too happy about the prices. Nintendo (OTCPK:NTDOY) also seemed to steal the show with its display of games using its new remote control-like controller and its promise to ship in the fourth-quarter at a cheaper price than its competitors.

Sony seems to be confident that its "future proof-justified" console's higher retail prices can achieve strong sales. Learning from Microsoft's (NASDAQ:MSFT) blunder of coming up short in supply during the holiday season, Sony plans to mass produce at home and in China.

Separately, Sony was given a target price upgrade by Morgan Stanley Japan from 5,600 yen to 5,900 yen. MS maintained its equal-weight rating. Sony's ordinary shares (Tokyo: 6758) closed lower by 1.15% at 5,180 yen as major Japanese indices traded lower for the 6th consecutive day.

SNE 1-yr chart:

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Tagged: , Electronic Equipment, Japan
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