(30 June 2008 5:30 pm)

MUMBAI: Japaneses electronics major Sony presented a series of new initiatives designed to build on its previous three-year revitalisation plan and to position the company as the leading global provider of networked consumer electronics and entertainment.

In particular, the company will focus on strengthening core businesses, enhancing network initiatives and leveraging international growth opportunities to build for the future and drive further growth and profits.

Sony’s focus is to expand into new markets outside Japan, North America and Europe. New markets in regions including the Bric countries – Brazil, Russia, India and China. Sony is looking to double its annual revenue from the Bric countries to 2 trillion yen by 31 March 2011.

Sony will target annual sales of 2 trillion yen in the Bric countries (including revenues from Sony Ericsson Mobile Communications and SONY BMG) by that date, doubling 2007 sales with annual electronics segment sales alone slated to grow from 600 billion yen to 1.2 trillion yen during this period.

Going forward, Sony plans to accelerate business expansion through collaboration and integration, not just within each of the Electronics, Game and Pictures segments, but across the entire Sony Group.

Sony is also looking to expand its PC, Blu-ray Disc related products and component/semiconductor businesses into trillion yen businesses. Already LCD TVs, digital imaging (digital cameras and camcorders), game and mobile phones are trillion yen businesses. Sony also wants to ensure that 90 per cent of its electronics product categories are network-enabled and wireless-capable by the fiscal year ending 31 March, 2011.

Sony has identified a five per cent operating margin as a baseline of profitability to generate cash to continue to lead and innovate. Furthermore, it will target an annual return on equity of 10 per cent by the above mentioned date. Sony is also planning to allocate a total of 1.8 trillion yen to invest in and build key businesses and technologies over the next three years.

Sony is also promoting the concept of “open innovation”, whereby it is looking not only inside the company, but outside for technologies that foster innovation. By combing Sony’s inherent technological strengths with external expertise, it aims to accelerate R&D efficiency and enable the company to effectively respond to rapidly changing customer needs and preferences in the network era.

Through the creation of new user experiences, strengthening core businesses, driving innovation, and minimizing the environmental impact of its operations, Sony will strive to achieve not only sales volume, but also sustainable and profitable growth.

In the game segment, the two key drivers of new growth are non-game content and services in tandem with enhanced network capability. Sony also expects to achieve profitability in this segment in the fiscal year ending 31 March, 2009, a significant year-on-year improvement due to hardware cost reductions and an enhanced line-up of software titles for Playstation 3.

Key Game initiatives are:

1. Expand content and services available on the network platform

2. Continue to expand the PS3 customer base through the strength of Blu-ray Disc

3. Accelerate PS3 sales through upcoming key franchise software titles

4. Continue PS3 cost reduction initiatives

Network Initiatives: Sony will increase network and wireless connectivity across its family of devices and build a service platform to provide a seamless user experience across our key hardware devices and content. The plan is to to expand services that will enable customers to enjoy content such as motion pictures and television programming through the network on a variety of Sony products such as Bravia LCD TVs, PS3, PlayStation Portable and Walkman video music players.

Sony adds that its position in electronics and entertainment allows it to offer compelling network services. As an example of this potential, this November, Sony Pictures Entertainment will offer its summer film Hancock exclusively to all internet connected Bravia LCD TVs in the US before it is available on DVD. This film will be distributed to Sony customers directly to their televisions outside conventional distributors and without the need for any set-top box.