Can Sony Still Do A Turnaround?

There was a time when Sony Corp (ADR) SNE was considered a forerunner in the hardware and technology space. Even till sometime ago, the Street was expecting the company to turnaround by either launching a revolutionary product or by focusing on its core strengths. However, now it seems most people have given up on the company.

Rob Enderle, President and Principal Analyst at Enderle Group, was recently on CNBC to discuss Sony’s restructuring plan and what business verticals are driving the company down.

“The indicators are a little more positive than they have been, but that company is still incredibly complex and it’s very difficult to manage a company with this kind of breadth,” Enderle said. “I still maintain that they need to go back to basics, get the company back to a core that they can build from because that’s typically the strategy that turnaround that works long-term. As they leave the complexity in place, the problem is when you have got too many balls in the air you are going to end dropping some of them.”

“Actually, I think, the weak link is the content. The idea in acquiring content was to use content as an advantage to sell the hardware that never materialized. The content became a drag on the hardware […]”

When asked about the revenue projections made by Sony’s CEO from its movie and music business, Enderle said, “Well, with movie and music it depends on the hits. So, it’s very difficult to make an accurate forecast because as we have seen a lot of time big blockbusters don’t deliver the audiences that folks think they are going to deliver, it’s all about rolling the dice […]”

Shares of Sony were recently trading at $21.87, up 1.11%.