Do you remember the Walkman? Chances are you probably do (unless you're barely legal, and then you probably don't remember records, Pong, or life before remote controls, either). For a long time, the Walkman was the portable music player that captured the imagination of the roller-skating, leg warmer-wearing, Flashdance-obsessed masses. And it was, of course, all the handiwork of Japan's Sony (NYSE:SNE) that launched the revolutionary music player back in 1979. If I wanted to be dramatic, I could proclaim the end of an era, seeing as how Sony will no longer manufacture its Walkman product line in its native Japan.
It's no secret that the Walkman lost its street cred quite some time ago, and when it comes to revolutionary music players, Apple's (NASDAQ:AAPL) iPod is it right now. And of course, it's no secret that while companies like Dell (NASDAQ:DELL) and Creative (NASDAQ:CREAF) have competing music players, the company that probably has the biggest case of iPod envy is Sony.
Indeed, there's been plenty of buzz about Sony's musical products over recent history (including Walkman-branded phones created with joint venture partner Ericsson (NASDAQ:ERICY)), but so far, Apple continues to be the music device everybody seems to want (and entreaties for users to watch out for hearing impairment most certainly reminds me of my own family's warning about the Walkman back in the old days).
From here on out, Sony's Walkman products will be manufactured in facilities in China and Malaysia. It seems to me that Sony's exporting Walkman manufacturing from Japan really has more psychological than financial impact -- it's just one more example of the fact that the company has been cutting costs.
All that said, Sony has mystified me lately -- in particular its share price, seeing how it trades at a forward P/E of 81. Granted, it is an electronics giant and, as such, has some major consumer cache. Consider its PlayStation (although Sony has given Microsoft's (NASDAQ:MSFT) Xbox 360 a major head start when it comes to releasing the next-generation PlayStation 3).
But then again, Sony has made some big mistakes. What else could you call ceding the portable music market to Apple and further infuriating music lovers with the recent spyware controversy? Sony's electronics growth has slowed, and it has been working on restructuring to infuse more life into its operations. Along those lines, here's a recent Take about Sony's most recent earnings and some of the troubling elements that have beset the company.
On Thursday, Sony will report its latest quarterly results. I, for one, will be curious to see the details. Personally, I think recent votes of confidence in the stock, as evidenced by an upward climb in stock price (take a look at this chart for the visual), have been overly enthusiastic.
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Alyce Lomax does not own shares of any of the companies mentioned.
