Fri, Jul 27th 2007 3:58pm
Sony's attempts at a turnaround have been pretty slowgoing, but their latest quarterly results -- showing profits double last year's -- generated some enthusiasm that things were on the right track. Although some parts of the company's business have picked up, the biggest factor in the increased profits was a weakening yen, which boosted the value of overseas sales. Investors shouldn't discount the currency effect, but they do have some other reasons to be upbeat: the company's movie unit is doing well, and its Sony Ericsson mobile phone joint venture continues to grow its market share. While the electronic business overall is looking healthier, Sony's TV unit is still underperforming, and the gaming business is still in the can. Sony's video-game unit boosted its sales by 60 percent over the same quarter last year, which is great, except that its losses grew as well, partly because it's still selling the PS3 for less than it costs to build. The game unit got a new boss a little while ago, but it doesn't yet look like he's making a lot of progress. Sony announced a price cut for the US on one PS3 model, and also said it will deliver a new high-end version and a load of new games. But it's hard to see those small changes making a big difference in terms of getting the mass market to buy into the PS3, particularly when you contrast Sony's strategy to that of Nintendo, whose business is booming. Still, Sony's problems are far from solved -- but it is showing some signs of life.
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