The battle in the retail sector has continued to become more difficult over the years, as competition has come from a variety of companies. Sony Corporation (NYSE/SNE) is a perfect example of a once steady firm, one of the old blue-chips, which has fallen on hard times, as corporate earnings have been hit by tough competition in the retail sector.

 Firms in the retail sector for electronic devices are usually blue-chips, but over the years the fall in the corporate earnings of Sony has been quite pronounced. The firm, synonymous with TVs, was recently questioned whether it should leave that market altogether. Who can imagine that thought occurring 20 years ago?

 Sony recently made an important change, bringing in new Chief Executive Officer Kazuo Hirai to try to turn corporate earnings around. Currently Sony is on pace to lose money on TVs for an eighth consecutive year! A once-strong area for corporate earnings has become a black hole.

 Sony has been trying to reduce costs and boost corporate profits with job layoffs. According to the company, in 2011, it had 168,200 employees, down from 180,500 three years ago. In the third quarter ended December 31, 2011, sales were down 17.4% from the previous year. Part of the hit was due to the floods in Thailand and a portion is due to the strength in the Japanese yen.

 Sony once had a market capitalization of $100 billion. It currently trades with a valuation at just under $20.0 billion, quite a hit to a firm that was once one of the top blue-chips. The company is looking to exit poor markets in the retail sector and cutting costs, to try to become as lean as possible to increase corporate profits. With a significant decrease in employees already, the question is: who else is being laid off? If the firm is losing its visionary employees, those who will be part of the process to improve and create new products for the retail sector, this could be a huge mistake.

 As much as cost-cutting is good, true value is generated with new products that are unique and stand apart from the crowd in the retail sector. This is how Sony originally became one of the blue-chips, generating strong corporate earnings from innovative products in the retail sector like the “Walkman” and the original “Sony TV”. Us older investors can remember when owning a Sony TV meant getting the best quality possible, it was a product we really wanted above others. The main company that seems to be executing in the retail sector today like that is one of the new blue-chips, Apple Inc. (NASDAQ/AAPL).

 Just as Sony is trying to stop the bleeding in the retail sector, we are hearing rumors of an Apple “iTV.” Blue-chips that want to stay on top, like Apple, keep their foot on the gas when they have the advantage. Apple is hot in the retail sector. Apple customers love the firm and their innovative products. Now, as Sony is falling to the side, here comes yet another competitor to give Sony the push down the ditch.

 Can we really expect corporate earnings growth from Sony in such a hotly contested retail sector? Only if the company can come out with products that will “wow” us as consumers. I want to feel the need to buy a Sony product before anything else. Until I see such a product, the trend is for continued struggles at this once-mighty company amongst blue-chips in the retail sector.