- How to put Sony back to the golden age poses challenges for Mr. Kazuo Hirai, the Sony CEO took office from 4/2012.
Sony is determined to TV division profitable again after nearly a decade of losing
After one year of implementation of the restructuring plan set Japanese electronics conglomerate Sony, Kazuo Hirai finally was able to speak with neck dongNgay 9/5 last, Sony Corporation has announced a profit again after 4 years losses. Specifically, Sony has achieved net profit of 43 billion yen, or $ 435 million in the financial year ended on 31.03.2013.
Flourishes
Compared with a loss of 456.7 billion yen ($ 4.6 billion) a year ago, the result is a "swim upstream" spectacular. Not only improved profitability, sales rose 4.7%, to 6.8 billion yen (68.4 billion dollars).
To be fair, the weak yen also helped improve the profitability of Sony in the last financial year. In addition, revenues from the financial services division in Japan also contributed to the results. Specifically, the finance department has 149 billion yen profit, Parts 3 times the second is profitable film division of Sony in the U.S..
However, it is acknowledged that the restructuring efforts of Mr. Hirai in the past year to cut costs and streamlined operations apparatus is also an important reason Sony is profitable again. The Director General has aggressively cut 10,000 jobs, or 6% of the workforce, selling off parts of the building and a number of offices, including the sale of the Sony headquarters in New York for $ 1.1 billion.
Mr. Hirai also dissolve the joint venture with liquid crystal displays Sharp (Japan) and Samsung (Korea), and outsource production to the screen. Hiring outside help Sony TV offer better prices for consumers and contributes to reduced losses in TV array - which is a big part of the group. Currently, the loss of this segment decreased 137.9 billion yen ($ 1.4 billion) compared with 1 year ago, to just 69.6 billion yen (707 million dollars) and is expected to break even in year this.
These positive results are a first step in facilitating Hirai after a year of "reins" at Sony. However, analysts said that Hirai things that can be done in 2013 determined that Sony is firmly on the road to recovery or not.
The pressure increase new product
After drastically cut costs and streamlined apparatus in the past year, Mr. Hirai is facing an important test, which is proven capabilities to create the breakthrough products of the Group. Sony plans to launch the PlayStation 4, the latest version of the game control device at the end of this year.
Sony is determined to TV division profitable again after nearly a decade of losing
Search growth in new products is extremely important for Hirai, especially when many parts of Sony have not seen the light end of the tunnel, especially consumer electronics segment. In 2012, sales volume was down 31% for liquid crystal display TV, down 29% on digital cameras and 10% for the Vaio personal computers and video cameras. Because of the difficulties that he Hirai and about 40 executives from Sony have agreed not get rewarded for electronic array losses continue. Remember, these bonuses usually account for 30-50% of the annual income of the operator.
Therefore, if the new product does not bring the PlayStation 4 is expected to return as the pressure on Mr. Hirai will be great. But the PlayStation 4 will not bring large revenues even for corporations, because these devices usually control the new game will be heavy losses initially. On the other hand, revenue from the PlayStation 4 is difficult to increase as more and more consumers tend to spend more time and money on games online and on mobile phones.
The mobile unit is also an area in which he Hirai to address. Although new products such as smart phones Xperia Z received positive feedback from the market, but remains to be seen whether the company has broken the monopoly of the two rivals Samsung and Apple - which accounts for most of the profits of this industry.
According to the U.S. market research firm IDC, Sony has increased its market share in the smart phone market up 4.5% of the global figure of 3.9% quarter IV/2012. However, compared with sales of Samsung, Sony still very modest. According to Bloomberg Industries, of Sony phones sold 30.4 million vehicles last year, only 1/7 of the Samsung smartphone sales (218.2 million units). Narrowing this gap is an extremely difficult thing to Hirai.
Recovery of traditional products
A major challenge for Hirai to take part television is profitable again after nearly a decade of losing, due to weak demand and stiff competition from Samsung and LG Electronics. Sony aims to sell 16 million TVs in the current financial year (previous year's sales of 13.5 million units) by focusing on the TV screen ultra-high resolution.
Improved business conditions in parts of the world is falling off analysts such as Hercules mission of Hirai. "Making the TV division became profitable, segment profit increased strength and improved game Vaio profits will not be a simple thing," analyst Yasuo Nakane of Deutsche Securities, said.
But it can not do the job. Because the state's long trenches alive with Sony has made many investors lose patience. In a letter to Hirai in mid-May 5/2013, Daniel Loeb, founder of Third Point, which holds 6.3% stake in Sony sold a portion urged Sony Entertainment, recreation department still should eat to help Sony reduce debt and have money to reform electronic parts are staggering. According to a source close to this issue will be brought before the board for discussion and can be implemented, if this is considered beneficial in the long run for the Group.
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