Sony is set to move away from TVs after losing $8.8 from their TV operations over the past eight years; instead the Company is going to take a stab at trying to be competitive in the mobile electronics, gaming and digital imaging markets.New Sony CEO Kazuo Hirai who earlier this week announced the laying off of 10,000 staff which is on top of the 16,000 laid off by his predecessor Sir Howard Stringer admits that things are looking tough for the Japanese Electronics Company who has cut 66,500 jobs across four restructuring plans since 1999.
Under the so-called new “One Sony” plan, the company has highlighted three sectors as its top revenue generators, including smartphones, digital cameras and Playstation gaming. This will take the Company head to head with Apple, Nikon, Canon, Samsung and Google; companies that are delivering billions in profits every quarter.
In his first strategy address since becoming chief executive of Sony, Kazuo Hirai said he will implement major changes including deep cost cuts at its unprofitable television business, and outlined the company’s need for a “sense of urgency” in executing those changes.
In Australia local CEO Carl Rose has refused to comment about Sony ever since SmartHouse and ChannelNews accused the local Sony operation of price gouging.
“I will definitely change Sony and revive it,” Hirai said at a news conference overnight. “There is no time but now for Sony to change.”
The remaining TV operations will continue to develop and commercialize OLED, Crystal LED and 4K technologies, and will expand sales in emerging markets and medical applications but not necessarily in the mass consumer TV market.
As TVs are de-emphasised, Sony is hoping that its focus on digital imaging, gaming and mobile electronics, will deliver 70 percent of revenue and 85 percent of operating profit in the year ending March 2015.
It was only a month ago that Hirai said it would be “very difficult to imagine Sony getting out of the TV business.”
Sony, which was worth more than $120 billion in 2000, is now valued at $19 billion. In comparison, rival Apple is valued at $584 billion and Samsung is valued at $164 billion.
Hirai admits that Sony’s challenges are numerous and daunting.
The Wall Street Journal said that its brand’s “once-sterling cachet has deteriorated and it can no longer expect consumers to pay a premium. After four straight years of losses, its battered finances don’t allow it to invest in new technologies at the same levels of Apple and Samsung Electronics. It is also paying the price for past strategic missteps.
“When Apple’s iPhone debuted, Sony’s phone operations were slow to react, entangled in a complex joint venture with Sweden’s Ericsson. Sony’s answer to the iPad reached the market six months after Apple released a second version of its tablet computer.”
In his address last night Hirai said “We can’t turn away from making painful decisions, because if we are scared of the pain, we won’t be able to change,” he said.
Hirai intends to have Sony’s headcount in order by March 2013 with the greatest restructuring stemming from the company’s limping TV business.
Sony said it aims for sales from emerging markets to grow 44% over the next three years.
He also said the company would create a new medical business segment. It plans to target life sciences for medical diagnostic products as well as growing the sale of equipment such as endoscopes using the company’s advanced image sensors.