Morningstar: Addressing serious issues at Sony SNE has been like altering the course of a supertanker with an undersize rudder. However, recent changes are beginning to create some positive momentum for the firm. First, the company announced that Bert Nordberg will take over the president role at the Sony Ericsson joint venture and that Sony CEO Howard Stringer will become chairman of the board of Sony Ericsson. Innovation has been lacking in recent years, as Sony Ericsson's product line has failed to keep pace with fully featured smartphones from competitors like Apple AAPL . We are pleased to see new leadership step in, bringing stronger ties to Sony and hopefully providing a much-needed boost to phone design.
The second development from Sony was the long-overdue reduction in price of the PlayStation 3 to $299 from $399. The console remains more expensive than key rivals, with Microsoft's MSFT Xbox at $199 and Nintendo's Wii at $249. However, reducing the premium between the consoles should be a key driver of sales leading into the critical holiday season. Ultimately, we believe success in the console war is driven by exclusive games, but having a reasonably priced platform is essential just to have a chance. PS3 sales are down 32% year over year, so the rest of 2009 will be a critical test of Sony's pricing strategy.