Sony CEO Hirai says selling TV business now an option


Staff Writer

After years of refusing to entertain the idea of selling its long-struggling TV business, Sony Corp. CEO Kazuo Hirai said Wednesday that putting the unit on the auction block is now an option.

“It’s not that we aren’t thinking about partnering or selling to other firms at all. . . . Depending on the situation, we’ll have to consider (such options),” Hirai said at a news conference at Sony’s Tokyo headquarters during which he introduced a new three-year business plan.

Previously, Hirai had said that the TV business was important to the electronics giant and that he was not thinking about selling it.

A price war with overseas rivals has kept the TV business in the red 10 years in a row, with losses amounting to ¥790 billion.

Still, the firm said earlier this month that it had returned to profit in the first three quarters of this business year and that it hopes to maintain the trend through the final quarter ending March 31.

Hirai on Wednesday vowed to revive the struggling firm in the next three years, aiming to post more than ¥500 billion in operating profit and a return on equity of 10 percent or more by fiscal 2017.

“The situation continues to be tough, but based on what we have done in the past three years, we will become a high-revenue firm that inspires customers with our products,” he said.

Despite his positive outlook, Hirai, who took over as CEO in 2012, admitted his first three-year plan, which covered fiscal 2012-2014, had failed, with the firm expected to post a massive loss two years in a row.

Over the next three years, Hirai said, the driving forces for the revival will be the device, video game and entertainment businesses that have been generating increasing sales and profit.

As for Sony’s smartphone and TV businesses, Hirai said that because demand for these products has been highly volatile, the firm will focus on securing profit rather than expanding market share.

Although Hirai had said the mobile phone business would be key to Sony’s growth, it has become a headache, with other smartphone makers — especially Chinese companies like Xiomi — rising in the market by providing cheaper handsets.

Sony had originally targeted selling 50 million smartphones worldwide this fiscal year ending in March but has slashed the figure to 39.2 million.

The firm also took a ¥180 billion writedown in the value of its smartphone unit in September. Because of that, Sony is expected to post a ¥170 billion net loss.

Earlier this month, Sony disclosed its goals for the mobile segment, saying it plans to post ¥900 billion to ¥1.1 trillion in sales, with an operating profit margin of 3 percent to 5 percent, in fiscal 2017.

Sony is shifting its strategy from selling as many units as it can to being more selective in its product lineup with a stronger focus on premium phones.

“By choosing where to fight and carefully selecting products, we will create a business structure that secures profits even if it means decreasing sales and investment capital,” Hirai said.

  • goldenblls

    I hope they stay in the smartphone business. Their phones are fantastic.

    • James

      So are their TVs