Toshiba and Sony feeling the pain as slump bites

The makers of laptops, TVs and other electronic goods said lack of demand for their products was the main reason for the bad outlook.

At Toshiba, the main crisis was due to slump in demand for its microchips, which go into digital cameras, MP3 players and other items.

In the UK, the electronics downturn has caused the collapse of electronics retailer Empire Direct and a rash of terrible trading figures from retailers such as Comet and Currys.

Toshiba reported operating losses of 158.8 billion yen (£1.25 billion) in the October-December quarter against a profit of 42.1 billion yen a year earlier.

It slashed its annual earnings forecasts, warning its financial year to March would see it posting a loss of 280 billion yen — its first for seven years.

Sony forecast a record 260 billion yen loss for the year to 31 March.

That would be its first annual loss in 14 years.

Even Nintendo, whose Wii games console has been a huge success, today cut its profit forecast.

However, this was mostly due to the rising value of the yen which cuts into the value of its earnings in Europe and the US.