In its three-year corporate strategy plan, Sony has highlighted that it is aiming to attain an operating profit of 500 billion yen ($4.2 billion) by focusing on profitable divisions within the company, such as the image sensor, gaming and entertainment businesses. While its mobile division has seen a turn for the better in recent quarters, a sale may not be out of the question as Sony looks to consolidate its offerings and focus on niche segments.
Sony has stated that it will continue to make investments in the growth segments as it looks to achieve a 10 percent return on equity by the year ending March 31, 2018. Going forward, the focus will be on profitability and not volume, with individual division heads getting more autonomy in decision making. According to CEO Kazuo Hirai:
If our initial mid-term corporate strategy was about reforms, the second mid-term strategy starting from the next business year will be about generating profit and investing for growth.
Hirai also mentioned that a sale of the mobile or the TV division has not yet been ruled out, stating, "I think we have to keep those possibilities in mind." Both divisions were placed in the "volatility management" section, with Sony saying that it will focus on minimizing risk and focusing on profits by carefully selecting launch markets and product areas.
For mobile, that indicates a reduction in the number of Xperia models on offer, as stated by the new head of mobile Hiroki Totoki last year. Sony has also said that it will look be seeking "potential alliances with other companies" in these divisions.
The TV and Mobile Communications businesses operate in markets characterized by high volatility and challenging competitive landscapes. In view of this business environment, Sony will place the highest priority on curtailing risk and securing profits in its operation of these businesses. Since both markets are experiencing intense cost competition and commoditization, Sony will strive to further increase the added value of its products by leveraging its in-house technologies and component devices.
By carefully selecting the territories and product areas it targets, Sony will seek to limit its capital investment and establish a business structure capable of securing stable profits. The Company will also continue to explore potential alliances with other companies in these areas, in response to changes in the business landscape.
Source: Sony
