New CEO: 'Sony Must Change; Sony Will Change'
Emerging markets, faster innovation and profitable TVs at heart of turnaround plan.
TOKYO -- “Sony must change; Sony will change,” said a defiant-sounding Kazuo Hirai, the new CEO and president, at a strategy meeting to present his vision for turning around the troubled conglomerate.
Speaking on Thursday at Sony headquarters in Tokyo, he said that focusing on emerging markets, reducing the time taken to develop innovative products and returning the troubled TV-making division are at the heart of that strategy.
“The revised forecast of a record [$6.4 billion] loss that we released two days ago hit me hard but strengthened my resolve … to restore Sony to its former glory,” said Hirai, who took over from former president and CEO Howard Stringer on April 1.
Three core business areas -- digital imaging, gaming and mobile -- will account for 70 percent of Sony’s R&D resources, 70 percent of group sales and 85 percent of operating profit by 2014, he said.
Despite eight consecutive years of losses, and not being included in the three core business areas, Hirai insisted that manufacturing TVs remained in Sony’s DNA and that it has no intention of exiting the sector.
“One of the reasons we will be remaining in the TV business is because they are a central device for bringing Sony content to people,” said Hirai
The executive also acknowledged the growing importance of smartphones as a hub for delivering film, music and games to consumers.
Sony is targeting sales of ¥1.8 trillion ($22.2 billion) from its mobile business by 2014 and plans to turn current losses at the division into profits.
The company has also set an ambitions target of $12.3 billion in sales at its games division by 2014. While Hirai pointed out that Sony was increasing its range of games available for smartphones and other mobile devices, the current shift away from console gaming will be difficult to compensate for.
Emerging markets are predicted to account for 60 percent of global sales by 2014, with a target of $32 billion in sales.
“Sony already has the No. 1 market share in markets like Mexico and India in audiovisual and IT equipment,” Hirai noted.
“Sony Pictures Television is also in a leading position in India with multiple successful channels there,” he said, suggesting this was an example of how Sony’s content and hardware business could synergize in emerging markets.
Sony will look at the profitability and potential of each division in the entertainment-to-finance-to-electronics conglomerate and assess whether to proceed with each business, Hirai said.