Saturday, Nov 22, 2008
Deflation? Could this move be the very beginnings of the return of inflation?
The Independant: Sony hikes prices as yen value soars
Sony is planning big price rises in the UK because of the strength of the yen against sterling, in a move that threatens to put extra pressure on Britain's embattled retail sector.
The Japanese electronics giant said it had informed trade customers in the past 48 hours of the price increases in Britain and Ireland driven by the yen's rise against the pound and the euro.
Posted by flintster1994 @ 12:37 PM (1423 views) Add Comment
25 Comments
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1. planning4acrash said...
Falling sound is a symptom of monetary inflation that causes price inflation, this is why increase in the money supply is the only sensible measure of inflation and why government don't use it!
2. planning4acrash said...
Oops, falling pound!
3. japanese uncle said...
Unfortunately Sony brand is no longer a symbol of excellence. Many users argue 'Sony timer' which means Sony products tend to fail precisely after one or two year warranty period expires. Actually I experienced this disgraceful phenomena myself twice in the past four years with its CD player and DVD player. I have never bothered to consider Sony for potential purchase since then. Sony can and will have to hike its prices due to the combined effect of GBP decline and Yen appreciation, but that just brings its sales to nil. Some Japanese brands with production base located other areas than Japan can reasonably withstand and absorb the effect of declining GBP, while some of those with production base remaining in Japan, but particularly strong brand advantage with superior quality, such as Denon which I use now, can even overcome such combined adverse effect. Generally this case of Sony seems too isolated and small in its impact to have some influence over the general deflation/inflation trend here.
4. japanese uncle said...
One more point:
Sony is currently run by an Englishman, an Oxon, which is another bad factor for the company. Japanese manufacturers including Sony used to be well known for the remarkably low barrier between officers and general employees. CEOs and chairmen were commonly seen to have lunch alongside their factory workers in their company canteens. Honda did not even have private offices for their board members! CEOs' salary were typically maximum ten times bigger than those of the lowest paid. Everyone including production line workers was keen to think in terms of the company management, which was the strength of the Japanese firms. Those days were gone (though I am happy to see the remnant of such philosophy in Honda UK's attitude in paying basic salaries to their workers during the temporary closure of their factory). Management of not a few Japanese firms including Sony, have started to consider and treat workers like replaceable components of equipments, paying themselves phenomenal, though much more modest compared to their US/UK counterparts, salaries and bonuses. Workers in the companies like Sony no longer work for 'our own company', but are forced to work for 'them', whose implications are tremendous, of course in a negative way. Anglo-American way of corporate management, complacent in paying themselves and shareholders who never really work, millions, and making employees redundant with neither a grain of consideration to the welfare of sacked employees and their families, nor their own fault and incompetence in bringing their companies into such pathetic position to fire workers ruthlessly, must be dumped once and for all, for the peace of mankind.
5. scandinavian pessimist said...
This is good news, and this is exactly why a recession is so important for this country. The weak pound will reverse some of the offshoring from the last decade, and encourage UK manufacturer to produce real things instead of making up CDOs, CDS and other dubious letter combinations to pretend they contribute to the GDP. It will be a painful and slow but in the end a very healthy transformation.
6. stillthinking said...
Wait. Surely Sony have a whole load of Christmas stock they need to shift because next year its out of date...
If demand has gone they are not in a position to raise prices, they need to offload their stock and mothball their production. So this could, of course, be some press release with the purpose of buy Sony stuff now because ... its a bit meaningless to suggest that goods on the shelf now are somehow cheap and there is some magic day when price increases have to be absorbed.
I am sure that Sony will have to raise prices in the end but this is a pre-Christmas sales booster !
7. Jj said...
This won't be just Sony in a couple of months but the majority of manufacturing companies in Japan that export to Britain hiking their prices. Wake up government and get some intelligent action taken, this is going to cause a lot of pain for consumers in 2009.
8. Cf said...
Could this be something to do with Samsung breaking a partnership with Sony where they provided Sony with all of their TFT and Plasma panels for their TV's. It will cost Sony more to make TV's now.
9. enuii said...
Spot on Stillthinking, if folks think electronic stuff will be cheaper in the New Year they will put off buying, if however they think that they will by significantly dearer in the near future they will be sorely tempted (as is human nature) to fill their boots now.
10. Cr4shw4tcher said...
"The weak pound will reverse some of the offshoring from the last decade, and encourage UK manufacturer to produce real things"
Hey lads, let's put together all the money we we earned from stripping and start up our own chuffin' steel works ! - that used to be comedy.
11. Alan Lubin said...
japanese uncle. i'm right there with you on that - 2 sony vaios that died just after a year of use and the build quality just gets worse and worse.
my other bugbear with Sony is that all their domestic stock is in Japanese language only and if you happen to a gaijin whose skills don't extend to reading Japanese then your are stuffed. obviously if you cant read the local language then it's your own look out. but this feature is available on the international versions of their product. it sticks in my craw that they actively remove that function from their products in order that non-japanese have to be the more expensive international versions. most other Japanese manufacturers happily sell domestic products with international language support.
12. shipbuilder said...
JU, it's just not Sony, unfortunately -
http://en.wikipedia.org/wiki/Planned_obsolescence
13. japanese uncle said...
shipbuilder
My Kenwood receiver perfectly workrf for 9 years despite 24/7 heavy use, while my Nakamichi CD player worked for 14 years impeccably, and my Yamaha DVD player is working 3 years without a hint of mulfunction. My Bosch cleaner is working after 7 years use without any problem.
14. shipbuilder said...
JU, the Japanese way, as you mentioned and as exemplified by Toyota, has already won through, hence why the 'big three' in the US are going down the toilet.
A number of western companies have tried to adapt 'The Toyota Way' in particular, to the profit/shareholder-focused western business model. It will always fail because the very essence that western companies miss is that it is customer/community and worker-focused, the money coming as a result of that. It's a cultural shift that western companies simply can't grasp.
15. japanese uncle said...
shipbuilder
Yes, and the concept of 'planned obsolescence' itself is an evil philosophy resulting from the incredibily greedy selfish attitude of Western or particularly Anglo/American business model which should never be tolerated. I simply cannot believe such a ridiculously arrogant and impudent approach is discussed as if it could possibly be a valid corporate strategy. This is none short of crime, subject to summary execution in China, maybe.
16. Endgame said...
Japanese Uncle, you are right. Every Sony item I have owned has failed in an unreasonably short period of time or had annoying faults. I will never buy Sony stuff ever again or encourage anyone else too. I also own many Denon items none of which have failed. This planned obsolescence is a crime as the consumer rights act states that a product should be fit for purpose and durable. These rights are for six years. Ive had Sony dvd, vhs, camcorder, cassette deck, fail just after a year and no free repairs either. Bar stewards
17. Cybervigilantes said...
This is a great little animation about 'stuff' http://www.storyofstuff.com/
"The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world"
18. Smithofborneo said...
Ripoff Britain already paid double for Sony and other big brand products so all Sony is doing in raising its prices is shooting itself in the foot again. British management is bad but Sony is just as bad or worse. Nobody else in electronics will RAISE prices in Britain. Absolutely ludicrous. These people get paid more than you and me. Christ!
19. paul said...
"Sony products tend to fail precisely after one or two year warranty period expires"
This is a symptom of cheaply manufactured OEM components - many of which are manufactured in Taiwan, and the assembly is done in the Phillipines or Vietnam.
Many of the Japanese domestic products have components sourced in Japan and are nearly always assembled in Japan, hence better quality. Sony make a better product in Japan than in the EU.
Some premium products for the EU are made and assembled in Japan though! Buy an expensive Sharp LCD TV in the UK and you'll find it was imported from Japan. There must be some logic to it - don't know what it is though. Brand protection?
20. Handle_it said...
Given that so many people here in the UK will soon have no job at all or be working for minimum wage it might just be a mute point that TV's are going to cost more ? I think in general people will decide that a TV that works is pretty much okay and they might even be able to buy a licence to watch it - just as long as the leccy hasn't been disconnected.
21. handle_it said...
Given that so many people here in the UK will soon have no job at all or be working for minimum wage it might just be a mute point that TV's are going to cost more ? I think in general people will decide that a TV that works is pretty much okay and they might even be able to buy a licence to watch it - just as long as the leccy hasn't been disconnected.
22. Uro_who said...
It's not just sony. I'm quite partial to mountain bikes. The Stumpjumper full suspension carbon fibre works bike has always been about £3500. The 2009 is priced at £4500. I can't see anyway on God's Earth that anyone in their right mind would pay it but thats some jump. The reason is that the bike and all of the component are priced in dollars. I'm not sure if Stumpjumer FSR S-Works are on the basket of goods for CPI however.
23. mytimeisnigh said...
Sony were overpriced anyway.
24. planning4acrash said...
Planned obsolescence can only occur in monopolies, which are facilitated by fiat money being under the control of a few establishment financial groups, and, via government regulation that is too costly for small fry, but easy to meet or circumvent for the majors.
25. Baudot said...
So much for deflation then.