Sony just reported a rare annual net loss of $1B amid a slump in demand for electronic products, especially from expensive brands like Sony. The company is now under pressure to reduce the cost of its operations. It has started by shutting down three plants in Japan to cope with reduced demand and slumping prices.
The strong yen and an expensive PS3 did not help: Sony is reportedly still selling the console at a loss, while rivals make a profit on their hardware. Sony will be forced to change the way it operates, probably much faster than the company would like to.
All options are on the table, but basically Sony’s products are too expensive for the value that they bring when compared to the competition. Costs need to be reduced or products need be radically better, preferably both at the same time.