The News: The Associated Press reports that Sony Corporation is planning to cut their number of parts suppliers in half next year. It’s part of the company’s overall plan to turn around the recent financial losses from the poor economy. The company will cut from 2,500 suppliers this year to 1,200 next year. The remaining suppliers will get more business, which Sony plans to leverage for better prices on parts.
Our Take: This is a move for Sony as a whole, not the PlayStation division in particular, so it’s hard to predict how it would impact that arm of the business. This is certainly bad news for certain suppliers who relied on Sony contracts, but should help Sony’s health as a whole. In the long run, it’s this kind of move that might lead to cheaper manufacturing costs and price drops.