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Sony To Spin Off A/V Business

Tokyo — Sony CEO Kazuo Hirai said Wednesday that the company would spin off its video and sound segment into a wholly owned subsidiary, similar to last year’s decision to do the same with Sony’s struggling TV business.

In addition to the split-off, the company will realign its hardware business into tiers based on their growth prospects, with a renewed focus on content, gaming and imaging sensors as the primary revenue generators, as well as network services, and a lesser concentration on TVs and smartphones.

The goal, Hirai said, is to focus more on profits from its entertainment businesses such as movies, music and videogames. Hirai said other units could eventually be spun off as well, though nothing was currently planned.

Hirai expects the subsidiary model to produce leaner, more focused business units that can adjust more quickly to market conditions and put more autonomy in the hands of managers.

The move also appears to reverse Hirai’s unification initiative, dubbed Sony One, which he introduced in 2012 as part of an ambitious comeback strategy.

In the end, he said, Sony wants to grow operating profit to $4.2 billion in three years, and turn a profit within the TV business this year.

Rather than pursuing sales volume, Sony will focus on growth in profitable areas such as its image sensor unit, which anticipates greater demand for better smartphone camera technology and increased use of sensors in next-generation vehicles.

Hirai told reporters that Sony will “stress profitability, not uniform growth in scale.”

The spin-offs are expected to be completed by Oct.1, the company said.