Beverly Hills, Calif. — Mark Twain once said, “The report of my death has been greatly exaggerated,” and yesterday Sony president Mike Fasulo echoed that sentiment regarding his company’s CE business.
Speaking to a small gathering of reporters, here, Fasulo walked back some of what he called “the mistaken interpretation” of Sony CEO Kaz Hirai’s recent comments to Japanese analysts in Tokyo, in which he spoke of a “spin-off” of the company’s device businesses.
“We’re not spinning anything off,” Fasulo declared. “[Hirai’s] message wasn’t ‘we’re getting out of any businesses.’ His message wasn’t ‘we’re divesting ourselves.’ His message was: ‘Different businesses, different markets require a different way of going to market.’”
Fasulo said the strategy of turning Sony’s current A/V business into a wholly owned subsidiary follows the blueprint laid out last year when the company “split out” its TV business.
“These are volatile categories and need some different solutions to be successful,” he said.
The strategy of breaking out categories into separate subsidiaries “gives the group clear accountability, which is critical in our business, and it also gives them autonomy in decision-making. It also provides for a light infrastructure, which allows us to be competitive and successful in the space we’re in.”
Fasulo described the audio business as “an opportunistic business,” similar to the TV business, in which independence and autonomy in decision-making with a light overhead has proved crucial in turning the business around. “I feel as if we got very clear direction and that direction is very well aligned with what I started when I got appointed a year ago. We need that focus, and I hope you’ve seen we realized that focus. We built that focus around product, process and people,” he said.
Fasulo stressed the effectiveness of the strategy regarding the TV business and beyond.
“This past year, for our business in the U.S., it has been the best year we’ve had in a decade. And that is based on all financial measurements. To reiterate: On a financial basis, the U.S. electronics business had its strongest year in 10 years,” Fasulo said. He declined to elaborate in advance of Sony’s formal fiscal earnings announcement next month.
Looking ahead, Fasulo said Sony’s approach will remain focused on profitability and not market share. The company has enacted measures to continue to simplify the back end, improve cost structure and focus on the development of its labor force.
After acknowledging that Sony will close eight of its 10 remaining Sony Stores, he said many of the current store employees will be redeployed in an expansion of dedicated Sony Experience spaces in retail partner locations including Best Buy, Bjorn’s and others.
Sony will continue to train retail partners’ employees who will work exclusively in the dedicated Sony Experience spaces. “We train them. They are solely dedicated to Sony products, but our partners employ them,” Fasulo said.
The retail approach will primarily revolve around 4K. “Our Sony Experience spaces are built around high-quality 4K content. We can demonstrate how we deliver the Ultra HD experience through content, devices, audio, gaming — the full capacity of 4K.”
He singled out action cams as a key. “4K action cams are the new camcorder,” he said. “You can take it in your pocket or your purse and be ready to capture that special moment. We are taking a premium approach to the category, ever since we introduced the very first 4K video camera.”
From an overall product approach, Fasulo said Sony will continue to focus on the premium end of the market, as it has done with its TV business. “Experience and demonstration is key, whether in brick-and-mortar or in e-commerce,” he said.
“In all our categories, audio, imaging, TV … we will continue on with our premium message, a premium approach.
“We will continue to work closely with the retail partners we feel are capable and interested in quality demonstrations of what Sony has to offer among content, device and entertainment.”