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Hirai: Getting Closer To The 'One Sony' Goal

12/15/2013 07:00:00 PM Eastern

At the end of February 2012 a couple of things happened in Orlando that has never happened in this business before.

First off, two major buying groups, Nationwide and BrandSource, both held their respective conventions at the same time in the same city.

But, more importantly at the same time, unilateral pricing programs (UPP), or forms of it, were implemented by several major brands, led by Sony.

UPP was the talk of the separate buying group gatherings in Florida, which led one of the group’s leaders to philosophize about the state of the market, saying, “We need Sony to be Sony again ... to lead and to innovate.”

That could describe the marching orders of Kazuo (Kaz) Hirai, who since April 2012 has held the position of representative corporate executive officer, president and CEO, Sony Corporation, and in June 2012 was appointed a director of the Sony board.

Much of what Hirai has done since taking charge at the Japanese CE giant has been to make “Sony be Sony again” — and not just by introducing cuttingedge, must-have products that have the well-designed Sony aura around them, as in years past. The products, and the company itself, must be profitable.

A herculean task? Surely. But if anyone has the resume to get Sony’s hardware swagger back, it is Hirai.

The multilingual executive, who grew up in the U.S. and worked both here and in Japan for Sony, has worked on both its entertainment and electronics operations.

Hirai began his career with Sony Music Entertainment Japan back in 1984. By 1995, he joined Sony Computer Entertainment America (SCEA), and in 1999 was appointed president/COO, where he marked his biggest career achievement: putting Play- Station on top of the game business and driving the growth of the PlayStation Network.

As president of the networked products and services group at Sony, Hirai successfully launched the Music Unlimited and Video Unlimited online services.

But his current job is far more daunting. Along with his management team, Hirai is in the process of relaunching the Sony brand, putting it back in the conversation about having cutting-edge products in a variety of categories while trying to struggle back to profitability in CE.

Sony reported back in February 2012 that it registered a corporate net loss of $2.38 billion in its fiscal third quarter, with sales of consumer products down 24.4 percent year on year.

While the financial fortunes of a company the size of Sony has its twists and turns, in its most recent financial report for its fiscal second quarter, ended Sept. 30, the net loss year on year increased due to its movie business.

But on the electronics side, the part of Sony that has taken it on the chin in recent years and is its core, sales were up in its home entertainment and sound segment. TV sales were up, and its operating loss decreased. Sales were also up for smartphones and in games. While reduced losses in both areas are still not acceptable results, they are progress given the recent past.

Since April 2012 Hirai has been visiting more than 55 Sony sites across 17 countries, spending a lot of his time in the field communicating with Sony’s global employees. And he has been sharing with Sony employees the significance of “One Sony” in revitalizing the business and the importance of delivering compelling user experiences through the convergence of Sony’s unique assets.

For this report, Hirai answered a few questions from TWICE about progress Sony has made this year and what 2014 may look like.

TWICE: What is your biggest accomplishment in CE side this year?

Hirai: While some of our product categories have been faced with challenging markets, there has been a lot of progress in our mobile, digital imaging and gaming businesses, which Sony has defined as growth drivers.

For example, we were able to introduce our new flagship Xperia Z1 smartphone in many territories this year. The Xperia Z1 smartphone is packed with the best of Sony’s technologies and is a prime example of the “One Sony” direction I have been focused on since I became CEO of Sony Corporation.

We have also received rave reviews on some of our digital imaging products that we launched in the U.S. market, like the A7 (Alpha 7) series and the QX lensstyle camera, which has just received 2014 CES Best of Innovations Design and Engineering Award.

In games, we introduced the highly anticipated Play- Station4 computer entertainment system in Americas and Europe in November.

And for the TV market, we brought a compelling 4K experience into the living room with the launch of our 4K Ultra HD Bravia lineup and the Video Unlimited 4K delivery service along with 4K Media Player in the U.S. market. Customers can enjoy nearly 100 titles of native 4K content from Sony Pictures on our 4K Ultra HD TVs, which is a unique combination of technology and content that no other manufacturers can offer.

TWICE: How important is Ultra HD’s success to Sony’s immediate and future growth?

Hirai: In this fiscal year, our efforts to turnaround the TV business have been steadily progressing, and we expect a significant improvement in our operation this year. However, due to stagnation in emerging markets and the unfavorable impact of the depreciation of emerging market currencies, the outlook for the TV business still remains challenging for us.

Under these circumstances, it is important that we continue to focus on value-added models, such as 4K Ultra TV, to improve profitability as well as continue cost reduction efforts in operations. We have been at the forefront of 4K, from professional broadcasting cameras to 4K Ultra HD TVs to 4K personal camcorders, and are ready to take your 4K viewing experience to a whole new level.

TWICE: Can you provide a hint as to what some surprises may come from Sony during International CES and in the new year?

Hirai: I am excited to be an opening keynote speaker at CES 2014 on the morning of Tuesday, Jan. 7, so stay tuned. And, as always, visitors can also expect to see a wide range of new and exciting products and services at the Sony booth.

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