Sony today cut its annual income forecast by over 30 per cent, claiming price erosion in key consumer electronics product categories will hit margins hard.

The Japanese giant will still do very nicely in the year to 31 March 2005, however: it said it expects its income to grow significantly over the previous year.

Sony now says the year's sales will total ¥7,150bn ($69.56bn), ¥200bn ($1.95bn) below its previous forecast, made last October.

Operating income will be ¥110bn ($1.07bn), well down on the previous estimate of ¥160bn ($1.56bn) but nonetheless 11 per cent up on FY2004's figure. The reduction in the forecast arises from falling video camera and TV prices, and a slowdown in demand for the company's semiconductor products, Sony said. Japanese sales of Sony DVD players, portable audio products and PCs have fallen too.

Even so, net income will be up a whopping 70 per cent to ¥150bn ($1.46bn) on FY2004's profits, Sony said, thanks to a reduced US income tax burden. ®

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