Tokyo: Sony Corp aims to earn a 5% operating profit margin in three years by turning its struggling LCD TV and game operations profitable next year and launching 3D TVs and lithium-ion batteries for electric vehicles.
Sony, which is headed for its second-straight annual loss, shed jobs, closed plants and sold non-core assets this year to improve its cost structure, and investors are now convincing growth strategy from Sony management.
“This is not a one time or short-term initiative,” Sony chief executive Howard Stringer said, putting forward Sony’s target for a 5% operating profit margin and a return on equity of 10% in the business year starting in April 2012.
“We will continue to be more efficient,” he said but dodged questions on whether further staff cuts might be needed. “We must be light, speedy and tough.”
Sony, whose Bravia TVs now lag a long way behind Samsung Electronics Co Ltd in the global flat TV market, said it was aiming for 20% market share by March 2013.
It also plans to launch 3D TVs next year, enter the promising market for lithium-ion batteries for electric vehicles and will work to grab 40% market share in 2012-13 for its electronic reading devices.
Sony, which is locked in a three-way battle with Microsoft Corp and Nintendo Co Ltd in the global game industry, also said it will make its game operations profitable next year by cutting costs and expanding sales through 3D games.
Sony in September launched a cheaper model of its PlayStation 3 game console to better compete with Nintendo’s Wii and Microsoft’s Xbox 360.
Thanks to the more affordable version, the PS3 in September became the top-selling console in the US for the first time since its release in late 2006.
Pioneer No Longer
Sony pioneered the mobile music market 30 years ago with its Walkman and once ruled the global television industry in the era of box TVs, but it is now struggling to keep pace with nimbler South Korean rivals and innovative US IT companies.
Its portable music players have been in the shadow of Apple Inc’s iPod in recent years, while it is struggling to keep up with Samsung for other products.
In electronic devices, Sony and Amazon, the two largest players, are vying to establish a toehold in a market that they believe will become a profit driver as more consumers enjoy books, magazines, newspapers and other media on the book-sized tablets.
The maker of Cyber-shot digital cameras and PlayStation videogames has cut 16,000 jobs since the global downturn last year and plans to cut the number of its manufacturing sites to 47 by May 2010 from 57 in February 2009.
It plans to cut ¥300 billion in costs this business year to March 2010, and has already carried out about 80% of the targetted reduction in the first half through September.
Shares in Sony closed down 2.2% ahead of the announcement, underperforming a 1.7% fall in Tokyo’s electrical machinery index.