Sony midterm plan focuses on core businesses, networking

by Hiroko Nakata

In its three-year business plan unveiled Thursday, Sony Corp. said it aims to see annual sales in three additional business categories top ¥1 trillion, joining the four already above that target: LCD television sets, digital cameras and camcorders, games and mobile phones.

Under the plan for business 2008 to 2010, Sony is counting on boosting sales in personal computers, Blu-ray Disc-related products, and components and semiconductors.

“We will remain focused on profitability,” Sony Chairman and CEO Howard Stringer said.

Japan’s best-known consumer electronics maker is vowing to position itself as the global leader in 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 said in a statement.

Sony expects its TV business to be profitable in the business year to March 2009 as a result of a variety of cost-reduction steps.

It will invest a total of ¥1.8 trillion in key businesses and technologies over the next three years. Out of the total investment, it will spend about half that amount on components and semiconductors, including image sensors, batteries, display devices, and Blu-ray Disc-related components.

This summer, Sony will begin providing movies and TV programs in the United States through its Internet-based network for Sony’s PlayStation 3 and PlayStation Portable.

It will also bypass cable and satellite distribution systems to deliver content to its Bravia high-definition LCD televisions in November, Sony said.

Sony added that it envisions that 90 percent of its electronics products will be network-enabled and wireless-capable by the business year ending on March 31, 2011, and aims to double annual revenue from Brazil, Russia, India and China to ¥2 trillion by fiscal 2010.

In May, Sony said its sales and net profit reached record highs in the business year to March 31, thanks to restructuring efforts. But at around 4 percent, Sony failed to reach its goal of a 5 percent operating profit margin in the previous three-year business plan announced in 2005, as the yen’s rise against foreign currencies and global stock declines dented profits.

Sony said it still sees a 5 percent operating margin as a baseline and will target an annual return on equity of 10 percent by business 2010.