The new Sony: Kaz Hirai presents his strategy for recovery

In the past months Sony has been confronted with everything from a foundering TV business to a massive tax charge that together have pushed its expected loss for financial year 2011 to a record $6.4 billion. Today, Sony has gathered the press at its head office in Minato ward, Tokyo, so that recently-appointed CEO Kazuo Hirai can explain how he plans to turn the newly reorganized "One Sony" around.

Hirai wants everyone to know he takes the recently-announced loss very seriously. The key to recovery, he believes, revolves around strengthening the company's core businesses — digital imaging, gaming, and mobile — and turning around its TV business. Digital imaging is a core strength of the company, believes Hirai, and even though the point and shoot segment isn't expected to grow in the future given the growth of smartphones, he believes the company's strengths in interchangeable lens cameras can allow it to grow faster than the market and create a stable profit center.

On the subject of mobile, Sony's reorganization brings its cellphone, tablet, and Vaio computer lines all under the same umbrella with respect to R&D and design, to be headed up by the recently-announced future CEO of Sony Mobile, Kunimasa Suzuki. In order to compete in these challenging markets Sony plans to cut lead time on product development— the time between inception and release — by half. The company doesn't plan to stand still on gaming either; Hirai is planning to expand both the number of downloadable titles for its consoles and the number of PlayStation Suite compatible devices, although the CEO was light on details.

Returning the TV business to profitability is a major objective for the company, and in order to achieve it Hirai plans to reduce fixed costs by 60 percent and flexible costs by 30 percent through further restructuring — including the previously-rumored 10,000 job cuts, as well as reducing the model count by 40 percent in fiscal 2012. The CEO believes that LCD is still king and Sony needs to maintain its focus on this segment, but it is also exploring new technologies like OLED and Crystal LED, although unfortunately he's staying tight-lipped about timing details for the latter. Executing properly will bring the division back to profitability by 2013, he believes.

If Sony has been losing money for eight years making TVs, is there really a need for Sony to keep making them? Hirai answered that the company is committed to returning the business to profitability, although thinking about contingency plans is "natural for any business unit." In response to a later question about the possibility of Japan's TV makers collaborating in a way similar to Japan Display — with the Japanese government chipping in to help restore the business to health — Hirai had no comment to offer.

If Sony can't get its TV business back to profitability by 2013 it will be looking at ten years of losses for the division, at which point it will almost certainly have to re-evaluate whether it ought to be making TVs in the first place. Time is of the essence for the company, but its new CEO believes his One Sony can succeed where previous CEO Howard Stringer's Sony United has been deficient.

Source : theverge

Posted in: News