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Sony CEO Kazuo Hirai  (Source:
Changes to digital imaging, games, mobile and TV are on the list

Sony CEO Kazuo Hirai announced his "One Sony" approach today, which consists of a series of initiatives that aim to turn the company around.

Hirai, who became CEO starting April 1, has quite an agenda for the sinking ship he has inherited. He laid out five key ideas for transforming Sony's electronics business, including strengthening core businesses (digital imaging, games and mobile); turning around the television business; expanding business in emerging markets; creating new businesses and accelerating innovation, and realigning the business portfolio and optimizing resources.

Hirai announced previously that the three core pillars of Sony's business would be digital imaging, games and mobile. In today's "One Sony" presentation, he noted that he hopes to generate 70 percent of total sales and 85 percent of operating income for the entire business from these three pillars by fiscal year 2014 (FY14), which is the year ending March 31, 2015. 

To break it down further, Sony hopes to leverage key digital imaging technologies like image sensors, lenses and signal processing via consumer products and has a total sales target of 1.5 trillion yen for the consumer, professional and image sensor businesses by FY14.

As far as games go, Sony will continue offering gaming experiences through its PlayStation hardware as well as the PlayStation Network, but plans to expand its catalog of downloadable game titles and subscription services. Sony hopes for one trillion yen and an operating income margin of 8 percent by FY14.

With mobile, Sony wants to pull its VAIO, smartphone and Sony Tablet businesses together to offer superior mobile devices that feature the Sony Entertainment Network. Sony is looking for sales of 1.8 trillion yen in FY14.

While the three core pillars remain the primary focus of the company, the TV business still holds a special place in Hirai's heart. He has said before that he wants to turn it around after years of consecutive losses, and even said he'll be directly running this unit himself.

To correct the TV business, Hirai plans to improve design engineering efficiency, reduce the number of models by 40 percent from FY11 to FY12, and enhance the quality of its BRAVIA LCD televisions with OLED and Crystal LED Displays. Hirai hopes to make the TV unit profitable by FY13 by reducing fixed business costs by 60 percent and operating costs by 30 percent from FY11 to FY13.

Other changes that Hirai plans to implement around the company is increased sales of electronics in emerging markets from 1.8 trillion yen in FY11 to 2.6 trillion yen in FY14; entry into the medical industry by creating medical equipment, targeting sales of 50 billion yen in FY14, and implementing overall restructuring costs of 75 billion yen in FY12.

By completing all of the above, Sony hopes to generate 6 trillion yen and operating income margin of 5 percent for its electronics business in FY14. It also hopes for sales of 8.5 trillion yen and operating income margin of over 5 percent for the Sony Group overall in FY14.

Sony could certainly use all the help it could get. One of its worst issues was the LCD TV business, which had eight years of consecutive losses. After shaking up this unit in 2011, Sony finally sold its 50 percent manufacturing stake to Samsung in their LCD joint venture called S-LCD Corporation.

In February, Standard & Poor's Ratings Services confirmed an unfavorable outlook on Sony's long-term corporate credit rating where the long-term corporate credit and senior unsecured debt ratings dropped from an "A-" to "BBB+."

To make matters worse, Sony then announced that it would cut 6 percent of its global workforce as soon as the end of 2012. It then announced that it expected an annual net loss of $6.4 billion USD.

Source: Sony

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Key points
By fic2 on 4/12/2012 11:37:37 AM , Rating: 5
1. stop screwing customers
2. stop being a proprietary prick of a company
3. stop screwing customers
4. stop thinking that all customers are thieves
5. stop screwing customers

Oh, yeah, stop screwing customers.

RE: Key points
By Aibo on 4/12/2012 11:59:29 AM , Rating: 2
I like my Playstation but I hate how Sony handles their customers and taking features out of PS3.

RE: Key points
By retrospooty on 4/12/2012 1:21:58 PM , Rating: 2
+6 for this one.

Damn Sony has always been crappy with proprietary standards going all the way back to Betamax if not further.

The only other company that does that now is Apple... Get a micro-usb connector like every other phone on the planet FFS!

RE: Key points
By michael2k on 4/12/2012 7:41:36 PM , Rating: 1
It seems hyperbolic to compare Sony's anti-consumer bent with Apple's; Sony pushed nearly proprietary everything (ATRAC, Betamax, MemoryStick/MemoryGate, UMD, MiniDisc) vs Apple adopting many common standards (MP3, aac, h.264, HTML, mini DisplayPort) and those that aren't common but still standard (Firewire, Thunderbolt).

The few proprietary bits were ADC, the Dock connector, and the PCI/mSATA SSD, magSafe, etc, were arguably intended to be enhancements and not to control the market ala Sony. When ADC failed they adopted mini DisplayPort and Thunderbolt. The PCI/mSATA is used to make the MBA incredibly small, and magSafe is used across their line of MacBooks as a "value add".

RE: Key points
By Strunf on 4/13/2012 8:28:41 AM , Rating: 3
Are you joking? Apple is EXACTLY like SONY, they pushed all the proprietary solutions only changing when enforced.

The first Ipgod didn't support mp3, Firewire and thunderbolt, are "standards" but not free ones, funny SONY supported/s both Thunderbolt and Firewire, since the beginning.
MiniDisc were also made by other companies and not just SONY, at the time MD was a nice step forward when compared to CD players, I had one with optical connection to my PC and could easily record music to it, thing that was impossible with CD players, not only that but you could erase the MD Disks. MP3 players only appeared like 2 years after I got my MD player, and in terms of history MD started to show up almost 10 before MP3 players.

Apple uses proprietary connectors for no other reason than lock users into buying parts from Apple and not someone else, why do you think Apple sued a company that made Apple compatible adapters?...

RE: Key points
By retrospooty on 4/13/2012 9:03:26 AM , Rating: 2
You wont convince that guy of anything that isnt a 100% rosy view of Apple. He is too deeply controlled by the dark side.

RE: Key points
By michael2k on 4/13/2012 10:35:56 AM , Rating: 2
How dismissive of you. If I'm rosy it's because I own thousands of dollars in AAPL and because I believe in their continued growth.

RE: Key points
By retrospooty on 4/13/2012 1:29:21 PM , Rating: 2
Financially, yes, if your a stockholder its a good thing.

As for their products... meh. As for their behavior... they need a good spanking.

RE: Key points
By michael2k on 4/13/2012 3:04:12 PM , Rating: 2
My point is that I'm not being blind to downsides; the downsides are critical to monitor as when they reach critical mass it is time to exit as a shareholder.

The iPad 3 worries me; if they don't release one with a more efficient screen, CPU, and smaller battery (all of which are crucial cost containing measures) then the Retina display is hardly worth it. The question really is time; will they do it this year (and maximize profits) or next year (to maximize sales). Doing it this year means they may have to cut prices on "older" units to move them off the shelf, but on the flip side the "newer" units have much better margins.

If they do it next year they are sacrificing margins but reduce the chance of channel/inventory confusion. They might also have to do so simply because a 32nm A5 is scarce and all resources might need to be dedicated to the iPhone.

Or the technology might not be ready; we know that IGZO screens are coming, the only question is when they will be ready.

RE: Key points
By michael2k on 4/13/2012 10:33:07 AM , Rating: 2
The first iPod definitely supported MP3, what are you smoking? What else existed in 2001 for them to support?

Firewire and Thunderbolt not being free doesn't make them standard. Apple also supports USB and DisplayPort and HDMI!

I had MD player, and yes it was good at the time but got blown away by the iPod; which is besides the point, the point being that Sony kept using MD and ATRAC well into the HDD/MP3 era.

The only widespread proprietary Apple connectors I can think of that fit your description is the dock connector and there were real benefits to it's adoption at the time; the high voltage required to charge the iPod that used to be provided by Firewire as well as the ability to carry audio, video, USB, power, and Firewire over the same connector. It's not like any alternative standard connector existed in 2003 that Apple could have adopted that had those capabilities!

RE: Key points
By aliasfox on 4/13/2012 3:11:50 PM , Rating: 2
The iPod has always supported MP3, Apple has just never sold them. And yes, you can get music onto your iPod from sources other than iTunes.

My understanding is that Firewire is actually free to use, it's the Firewire name that Apple charges for. That's why Sony calls it iLink and everyone else uses its generic name IEEE-1394. The biggest reason it's not available on most computers is because it's not directly supported on Intel's chipsets (unlike USB2). With theoretical top speeds so close, there wasn't a huge reason for mobo manufacturers to pony up for another chip/connector.

Thunderbolt may have been introduced on Macs first, but this is an Intel standard that they're pushing out.

As for the iPod dock connector, back when it was introduced, it was the most elegant solution that could handle Firewire, USB2, audio, and power at the same time. With nearly as many iPods and iPhones sold as all other MP3 players and smartphones combined, it could be argued that the dock connector is almost as much a 'standard' as anything else in that market.

And just to sound curmudgeonly, mini and micro USB annoy me - I can't tell which one's which until I try to plug my cameras or (formerly) my work blackberry in and realizing that they're all different.

RE: Key points
By geddarkstorm on 4/12/2012 2:22:31 PM , Rating: 2
Unfortunately, leaked documents currently show Sony's plan as:

1. Tell everyone we are "laying out plans to become profitable"
2. ????
3. Profit!

RE: Key points
By Mitch101 on 4/12/2012 2:43:56 PM , Rating: 2
Steal Underpants

RE: Key points
By MZperX on 4/13/2012 12:34:12 PM , Rating: 2
6. Store customer info in encrypted form on SECURE servers

Focus on opening up Playstation digitally.
By quiksilvr on 4/12/2012 11:30:13 AM , Rating: 2
I have a fool proof business plan for them. They need to expand Playstation Plus to the Android Market, iOS and even Windows and digitize their games entirely on all fronts.

Imagine for $50 a year, you get unlimited PS1, PS2 and PSP digital downloads on ANY device. Your tablet. Your phone. Your PC. And, of course, your PS3, PSP and PS Vita.

And imagine with this plan, you can stream from your PS3 your games on any platform, and not just Sony-branded devices.

Open it up. Reap the benefits. Netflix did this and as a result is the biggest streaming business in the planet. Sony should do the same for games.

By ShaolinSoccer on 4/12/2012 11:50:01 AM , Rating: 2
$50 a year for all that content? You're kidding right? That's waaaaay too low!

By StevoLincolnite on 4/12/2012 12:00:02 PM , Rating: 2
$50 a year for all that content? You're kidding right? That's waaaaay too low!

NOT that I would be complaining if they did price it as such... But hell. They are more than happy to charge $100+ AUD for a new release title here, so it's pretty much not going to happen at that price point.

But I do agree with the Op, I wish these console manufacturers would push their games out to all the platforms much like what the humble indie bundle does. (Linux, Android, Windows, MacOS, iOS etc'.)

Or at the very least bring them to the other platforms they hold, in Sony's case it would be their Smartphones. Microsoft? Well. The PC and Windows Phone 7. - While you're at it Microsoft I would like Gears of War 2 and 3, Fable 2, Halo 3, ODST, Wars and Reach on PC too! Don't forget the eyefinity sauce! :)

/end dreaming

By The Raven on 4/12/2012 12:01:40 PM , Rating: 2
Yeah but when you find you have to cut your offerings a bit, your customers will have an unreasonable hatred for you. Slippery slope my friend. ;-)

Sell off Sony Music Entertainment
By Solandri on 4/12/2012 3:10:06 PM , Rating: 3
Sony Music Entertainment has about $5.6 billion/yr in revenue. Sony Pictures (movie studio) is about $7.3 billion/yr. The rest of Sony (mainly electronics) has nearly $75 billion/yr in revenue. Yet SME has been dictating to the rest of Sony what it should do to its electronic products.

Sony used to be the behemoth in the portable music player market. They made the Walkman - the first music player you could clip onto your belt - and dominated that market for nearly 2 decades. If you wanted to buy a portable cassette player, the first one everyone considered was a Walkman. Then in 1987 Sony acquired CBS records, and in 1991 renamed it Sony Music Entertainment. During the crucial period of the late 1990s when MP3 players were first taking off, SME required Sony's electronics division to incorporate DRM in all its MP3 players. That is, Sony MP3 players could not play MP3s. You had to encode the music using their own proprietary, DRM-encrusted format.

Consequently, Sony, the former 900 lb. gorilla, all but disappeared from the portable music player market. It was instead snapped up by Apple, which controlled about 75% of the MP3 player market shipping 50-60 million units/yr during the mid- to late 2000s. At $200 a pop, that's $10-$12 billion/yr in revenue Sony missed out on because they let their $5 billion/yr music division tell their $70 billion/yr electronics division what to do.

By liem107 on 4/14/2012 5:47:19 AM , Rating: 2
I totally agree with this one. I remember having my MD with its amazing sound quality but hoping that it could read mp3. I still remember thinking that the MD and Walkman brand would die very quickly if a change in direction was not made ... and Sony went for the ATRAC format under the pressure of SME... At that time an mp3 reader could only hold few megabytes when the MD could take more than a hundred.
At that time it was Kaz who was at the head of SME....then he went to SCE and the ps3 was locked out of MKV/DivxHD when the Sony Bluray players can read them.
This guy caused the loss of Walkman which was an iconic symbol then he will cause the fall of the Playsation... Now it is Time for Sony to fall as a whole.
Maybe they should get someone who is living in the real world of consumers instead of this guy who was born with a silver spoon in his mouth.

By SlickRoenick on 4/12/2012 11:34:27 AM , Rating: 3
Don't forget the firewall this time

By Penti on 4/12/2012 3:29:29 PM , Rating: 2
I get why they started up Sony Entertainment Network here in Europe to offer music to all their different devices, mobile and in your home. It's kind of obscure though. But I don't get the branding, it's simply Music Unlimited from Sony Entertainment Network (as they actually say in ads). Qriocity might not been the best but your name shouldn't be totally non-obvious obscure. What is Sony's Music Unlimited? A music service which won't work in your iPhone or iPad, or AppleTV under the longest domain name ever ( yes really!), their video service has no other branding then Video unlimited and is of course not available in my country (Sweden). Their website isn't the easiest to get your grips about, there is no desktop app and their service is powered by a third party omnifone. Not their own service at all. Just a reseller front basically. It can easily hit the same problems as the Omnifone powered Sony-Ericsson Play now! service. Or the cell phone operators branded versions of the same stuff, just multibranded useless stuff nobody uses. Why not build a brand and service people know instead.

Come on, Sony it self is a mayor film, tv and music producer and distributor, stop giving away your rights and you should be able to build your own service where your catalog is available everywhere.

A common service for music and movie/video should have done them fine, now they got nothing but some percent of the stuff they sell from omnifone. They need to do more. It's not just about joining up hardware, I need actual useful services on all those devices too.

By ricardonest on 4/12/2012 5:38:40 PM , Rating: 2
Major lay offs. What next? Need to sell intangible assets? I mean, they do have plenty of it.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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