Sony cuts sales targets, remains optimistic

Sony cuts sales targets, remains optimistic

Summary: Sales targets for digital cameras, smartphones and tablets have been cut by 13-17 percent for the year ending March 2015.

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TOPICS: Tech Industry
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Ailing electronics maker Sony has lowered its future sales expectations, but says there are "encouraging" signs of recovery.

At a press briefing on Wednesday, Sony CEO Kazuo Hirai said that a recent proposal by the company's largest shareholder Third Point LLC is being considered -- the potential sale of up to a fifth of its music and film business, according to Reuters.

The owner of Third Point LLC, Daniel Loeb, argues that by selling these assets -- which incude franchises like "Spider Man," cash would be freed up to help the firm stay afloat, and may boost stock prices.

Sony's CEO said that the proposal "is one that affects a core part of Sony's business and the direction of our management, so the Sony board will give it thorough consideration before replying to Mr. Loeb."

Despite the largest shareholder advocating the sale of music and film assets, Hirai said there are still "encouraging" signs of recovery for Sony within its electronics business. However, this hasn't stopped the Japanese firm from slashing a number of sales targets. There has been strong demand for the Xperia smartphone and new mirrorless interchangeable lens cameras, but 2014-2015 sales targets have still been cut to 1.3 trillion yen ($12.7 billion). Smartphones and tablets are expected to generate sales of 1.5 trillion yen.

The ailing electronics maker's overall sales target in 2014-15 of 8.5 trillion yen combined with an operating margin of over five percent remains unchanged. Once Hirai's recovery plan is complete, the CEO believes that 65 percent of the company's electronics sales will be derived from cameras, mobile technology and gaming.

In May, the tech giant reported net profit of $458 million in the 2012 fiscal year in comparison to a loss of $5.7 billion previously. Sony originally predicted net profit of $404 million, overall sales increasing by 4.7 percent to $72 million.

Topic: Tech Industry

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  • Content Publishing Business Is Holding Sony Back

    Sony invented the Walkman, but not its digital successor, the portable MP3 player. Why? Because of a conflict of interest with its record label. Publishing businesses hate anything which might render them less important. Getting rid of its content side would leave its hardware business free to compete more aggressively, and possibly be at the forefront of the next disruptive technology.
    ldo17
  • The Japanese have been flailing in tech of late

    When you talk about new phones and tablets, Japanese companies have been very much missing from the conversation -- there is Apple, Google, Samsung, HTC, LG, ASUS, and so on, with only Sony's name, among all Japanese companies, popping up at all, and even then, well down the list. The same with notebooks -- you might see a Toshiba on sale at a good price or a Panasonic Toughbook in a cop car, but that's about it. The lower end, "just good enough" camera market has been essentially taken over by smartphones, with traditional lower end/middle range Japanese stalwart Casio doing a slow fade.

    Much of it has to do with industrial design -- for the camera market, advances in things like sensors has allowed much better picture and video capability in much cheaper and more compact designs, but the Japanese have always mostly thrived on refinement in established markets rather than coming up something truly new (with old Sony Corp being the singular exception.) So you have companies like American GoPro thriving selling compact little sport video cameras, and UK's Blackmagic making big waves in the high quality, low cost cinema market. I have a couple of recent vintage middle-range compact Japanese cameras, a Nikon Coolpix P7000 and a Sony HX9V. I got them for videos taking. The older Nikon Coolpix P7000 is one of the rare Japanese compacts with a microphone input --a common complaint about compact cameras is that most now take can take good HD video, but are crippled by very poor audio -- but the Nikon lacked level control and was very touchy about which mic you use. The Sony (and its successor models) blows away the Nikon and pretty much all other compact cameras up to the lower end DLSR for video quality, but....it lacks an external mic connector, requiring an separate digital audio recorder for getting comparable audio quality (I have a lot of musician friends.) Its built in mics aren't bad as far as these things go, but you end up with rubbish with wind or loud volumes.

    GoPros and many competing products have mic inputs not because they are in high demand by their average users, but because it's a feature that makes the product more well-rounded and more useful to a wider range of users. Ironically, when Sony entered the sports camera market with their HDR-AS15 model, it was forced to include a mic input because, well, that's what the established competition had so it had no choice. All Sony could offer was refinement, but nothing really new, guaranteeing it a middle position in the market at best. The Japanese companies have to learn that in tech-driven, fast developing markets, "refinement" is only going to get you so far, which will not be that far at all.
    JustCallMeBC