Sony's cost cutting has begun to work and it is targeting huge sales from 3D-related technologies by March 2013, when it expects to again be profitable.
Howard Stringer, chairman, CEO and president of Sony, said in an analysts meeting, held here last week, that its streamlined business structure has “boosted efficiency and saved money.” He said Sony is 80 percent near its goal of 330 billion yen in company-wide cost reductions scheduled for its current fiscal year, which ends March 31, 2010.
The plan, which was put into effect after the company reported a net loss of $1.01 billion for its last fiscal year, has broken its electronics businesses into three segments: consumer products and devices, networked products and services, and B2B and disc manufacturing.
Stringer said Sony has been making “fundamental changes ... driving costs out of the company to right-size the company [by] closing facilities and reducing headcount.” He added, “Our forecast for our full year [ending March 31, 2010] is improved, but we have more work to do.”
Sony is targeting revenue from 3D-related products of more than 1 trillion yen (excluding content) in the fiscal year ending March 31, 2013.
Stringer explained that Sony has a “unique position with 3D”-related businesses, given its assets from content production to display devices and game to make available a wide variety of attractive content and hardware, and drive the creation of new 3D markets.
In a company statement for the conference, Sony said it will launch 3D-related products for the home, including TV, Blu-ray Disc players/recorders and 3D gaming on PlayStation3 in the fiscal year ending March 31, 2011.
And it will provide solutions for 3D content production, distribution and theatrical projection to lead the field in broadcast and professional businesses.
To enhance profitability Sony is centering on four initiatives:
• target consistent profitability in core hardware businesses (TV, game and digital imaging);
• provide new user experiences integrating innovative hardware, software and services;
• reach out to new customers and develop new geographic markets; and
• increase Sony's focus on environmentally conscious products and processes.
Through these measures, Sony is targeting an annual 5 percent operating income margin and a 10 percent return on equity by the end of the fiscal year ending March 31, 2013.
Sony is targeting consistent profitability in core hardware businesses (TV, game and digital imaging). It also wants to regain the leading market position in LCD TV business and target returning the LCD TV business to profitability in the fiscal year ending March 31, 2011 and achieving a 20 percent worldwide market share on a unit basis in the fiscal year ending March 31, 2013.
In the game business, its goal is to return to profitability by the fiscal year ending March 31, 2011, by expanding PlayStation Network services and cutting costs.
In digital imaging, the goal is to “maintain leading position as the No. 1 digital imaging brand in the world” via product differentiation and cost competitiveness.
Sony feels it is also in a strong position to provide more networked hardware and software services and generate 300 billion yen from networked services.