All the latest UK technology news, reviews and analysis

Sony and Panasonic see shares dubbed junk

22 Nov 2012
Sony logo

Fitch has downgraded Sony and Panasonic to its junk rating, citing ongoing weaknesses in the two companies businesses as the reason for the downgrade.

The move marks a three grade downgrade for Sony, from BBB minus to BB-minus and a two stage downgrade for Panasonic down from BBB- to BB.

Fitch's head of Asia pacific TMT ratings Steve Durose said Sony's difficulties appeared the greater of the two, warning that it is losing its hold on its core electronics market.

"Fitch believes that Sony is substantially more reliant on a strong turnaround in its core electronics segments than Panasonic. In particular we believe that Sony will struggle to record operating profits in its home entertainment, mobile phone and PC product divisions over the short-to-medium term," he said.

"Our view is that Panasonic, with its slightly stronger product portfolio, including a comparatively stable appliance business, is ahead of Sony in its turnaround efforts."

The two companies have seen their fortunes undermined, having been blindsided by the likes of Apple and Samsung.

Recent figures from research firm Gartner underscore Samsung's strengthening position, after it showed it had increased its share of the mobile market to 22.9 percent for the third quarter of 2012, up from 18.7 percent in the same period last year.

Forrester analyst James McQuivey said Sony and Panasonic had become victims out outdated development processes.

"Even as companies like Apple, Samsung, and even Microsoft have shown that the future of technology devices is more about the experience than about the engineering, Sony and others have continued to insist on an engineering-led model where smart people in labs far from real consumers make product decisions without seeing the big picture of how those products will be used," said McQuivey.

"That may have worked fine in the 1980s and 1990s, but it was already inadequate to the task of innovating in the past decade and now it's catching up with them."

Apple and Samsung's dominance of numerous core technology markets has caused trouble for numerous other competitors as well.

Prior to Sony and Panasonic, Finnish smartphone maker Nokia had suffered a similar fate when Standard & Poor's downgraded its rating earlier in August.

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
Alastair Stevenson

Alastair has worked as a reporter covering security and mobile issues at V3 since March 2012. Before entering the field of journalism Alastair had worked in numerous industries as both a freelance copy writer and artist.

View Alastair's Google+ profile

More on Finance
What do you think?
blog comments powered by Disqus

IT curriculum poll

With coding now compulsory in schools, how important are digital skills for the next generation of school leavers?

Popular Threads

Powered by Disqus
V3 Security Summit

V3 Security Summit Day 2: Botnet, skills and BYOD intelligence incoming

Keep V3 bookmarked for news updates on all the key security concerns and topics facing businesses

Updating your subscription status Loading

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button

Getting started with virtualisation

Virtualisation can help you reduce costs, improve application availability, and simplify IT
management. However, getting started can be challenging


Converting big data and analytics insights into results

Successful leaders are infusing analytics throughout their organisations to drive smarter decisions, enable faster actions and optimise outcomes

Information Security Analyst

Senior Information Security Analysts with excellent knowledge...

Senior Front End Developer

Front End Developers and Senior Front End Developers...

Senior Architect

Senior Architect with excellent experience designing...

Pre-Sales Engineer/Solution Architect- Cloud, VMware, Wintel/Linux

Cloud Pre-Sales Engineer/Pre-Sales Consultant/Solution...
To send to more than one email address, simply separate each address with a comma.