Sony Exec Talks About Life After VAIO And The Death Of 60% of Their SKU’s

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Sony Electronics who recently slashed more than 40 staff in Australia along with 60% of their SKU’s, while also exiting the PC market is now attempting to claw back their premium brand image with a new range of 4K Ultra High Definition TV’s.

Several retailers that ChannelNews has spoken to claim that they are cutting back “significantly” on the range of Sony TV’s that they sell with consumers now asking for an LG or Samsung TV over a Sony.

Sony Australia who have been suffering from poor PR for a long time is not returning calls with several former executives of the Australian subsidiary claiming that the Company is “struggling” however a senior Sony US executive has given an insight into the problems the Sony Electronics division is facing. 

Both Sony mobile and the division that handles the PlayStation products are not suffering the same fate as the consumer electronics division with both subsidiaries reporting increased sales during the past two quarters in Australia.

Globally Sony is claiming that they are looking to increase their Ultra High Definition (4K) sales four-fold in 2014, they are also trying to capture 10 per cent global share in LCD TV shipments.

The company has said it aims to ship roughly 20 million LCD TVs and estimates that it’s overall Ultra HD TV shipments will increase four-fold in 2014, with Ultra HD TV sales in the China market increasing six times.

Overall, Sony’s increased global LCD TV market share is expected to increase through sales of Ultra HD TVs.

The company did not say what volume of Ultra HD TV’s they aim to to reach globally, but market observers estimate shipments between 13 million and15 million units.

While Sony executives in Australia are not talking senior Sony executives in the USA are.

 In an interview this week with Dealerscope Mike Fasulo, Sony Electronics’ president and COO said that the Company is trying to refocus around home entertainment, which is television and sound, and imaging. Fasulo said No question that we have our work cut out for us and there is clearly a challenge”.

He added “let me make clear the difference between [the decisions about the] VAIO and TV [groups]. That came out of the February 6th earnings announcement kind of combined, and it’s really an independent decision.  The VAIO decision was one of sustainability of profit, because we couldn’t see a path to profit and growth and significant market share”. 

“It was decided to sell off that business and that brand name and exit the business. Very different than TV. TV is 100 percent a wholly owned subsidiary of Sony Corporation. The reason we’re spinning it off is to give it freedom – and not freedom from the point of view of ‘do whatever you want,’ but freedom from the point of view, again, of moving with velocity, making informed decisions on strategy, future technologies, investments”. 

“It’s similar to the way we treat PlayStation – as an independent entity but owned by the corporation. I wanted to lay that out first, because it ties directly into our strategy, and what we are doing at Sony Electronics. I’m terming it ‘going small, to grow,’ and it’s critically important that the grow piece goes along with going small”.

He said “We were in a situation where we couldn’t invest in almost anything because our dollars were all tied up in internal fix costs. So we had to go through the gut-wrenching decision of releasing people, which is never easy and should never be easy. But it was necessary”.

“With that, what we’re really looking at now is what I call the key word: focus. And focus as our go-to-market strategy will be around where the consumer gives us credit. And where the consumer gives us credit is as a premium brand. So we’re going to be focused on premium, across a very few areas, meaning we can’t have the number of SKUs that we’ve had in the past. We cut our SKU count by 60 percent – now that includes accessories and lenses as well. We’re very focused around home entertainment, which is television and sound, and very focused around imaging – and there are some real opportunities in imaging”.
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