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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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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.

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