Sony is synonymous with consumer electronics. It's especially big in TVs and game consoles like PlayStation3. Officially named Sony Kabushiki Kaisha, the company designs, develops, manufactures, and sells a host of electronic equipment, instruments, and devices for consumer, professional, and industrial markets. Professional products include semiconductors and components. A top global media conglomerate, Sony boasts additional assets in the areas of music (Sony Music Entertainment), film (Sony Pictures Entertainment and Sony Digital Production), DVDs (Sony Pictures Home Entertainment), and TV (Sony Pictures Television). Sony also has several financial services businesses and an advertising agency in Japan.
Sony's primary manufacturing facilities are located in Asia, including Japan where it is headquartered. Japan is also its single largest market by sales (32% in fiscal 2012). The US, China, and Europe are also key markets.
Sony realigned its reportable segments in 2012 as part of a reorganization. The operations of the former Consumer, Professional & Devices (CPD) and Networked Products & Services (NPS) segments are now part of the Consumer Products & Services (CPS) -- the company's largest segment by sales -- and Professional, Device & Solutions (PDS) segments. CPS includes LCD televisions, Blu Ray disc and DVD players, digital and video cameras, PCs, and gaming consoles. Certain PlayStation products are marketed and distributed by Sony Computer Entertainment LLC and Sony Computer Entertainment Europe Ltd. PDS, the company's second largest segment, includes broadcast and other B2B products, as well as semiconductors and components.
A smaller business segment, Sony Ericsson, was renamed Sony Mobile in 2012. As a result of a reorganization that Sony is undertaking, plans to even further realign its business segments are under way.
Sales and Marketing
Sony's products are marketed worldwide by sales subsidiaries and unaffiliated distributors, as well as direct online sales.
The rising Yen, decreasing demand for its products, pricing pressures, and the lingering global economic crisis has sidelined Sony in recent years. After logging a record profit in 2007, the company has seen its business stall as consumers tightened their belts. Increased spending and warming demand during the 2010 holiday season, however, signaled to Sony that the worst selling environment could be in the rear mirror.
Sony's consumer electronics segment, CPS, remains the company's bread and butter, accounting for more than half of total sales annually. But competition is fierce in this industry, with Apple paving the way in music players with the iPod, and Microsoft (Xbox 360) and Nintendo (Wii) jockeying for dominance in game console sales globally.
The most pressing part of Sony's current strategy is turning around its electronics businesses. With a new management team established in April 2012, the company moves forward with a plan to strengthen certain core areas: digital imaging, game, and mobile. Sony is trying to develop new products, expand its hardware and software offerings, and integrate the operations of its smartphone business (operated by Sony Mobile) with its tablet and PC businesses. Another aspect of this strategy is to turn around its TV business to improve profitability there; TVs generate a large chunk of sales within the CPS segment.
In a very competitive electronics environment, Sony is simultaneously trying to innovate and launch products in new markets, such as it is doing with medical peripherals like printers, monitors, cameras, and recorders. The company is drawing on its audio and visual expertise to build a 4K technology product lineup. 4K is said to deliver more than four times the resolution of full HD.
Sony also has been consolidating and selling off businesses and facilities. The company in 2010 sold the measuring equipment business of Sony Manufacturing Systems to Mori Seiki, a Japan-based precision tool maker, in a deal valued at about ¥6 billion (nearly $70 million). It also sold off its 90% stake in Sony Baja California, its main TV factory in North America located in Tijuana, Mexico, to Taiwanese company Hon Hai Precision Industry. It generated $217 million for its share in HBO Latin America, which it sold to Time Warner. Sony has also agreed to sell its TV production facilities in Mexico and Slovakia to Foxconn, the world's largest contract assembler of electronics and computer goods.
Anticipating increased demand for the small LCD panels used in smartphones, car electronics, and other digital gadgets, Sony, Toshiba, and Hitachi merged their small- and medium-sized LCD operations with the help of $2.6 billion of government-backed funds to fend off growing competition from rivals in South Korea and Taiwan. Sony holds a 10% stake in the joint venture, Japan Display Inc., which began operations in 2012.
On the music side, Sony's wholly owned subsidiary Sony Corporation of America (SCA) in mid-2012 led a group of investors in a high-profile, high-dollar deal. Alongside the Estate of Michael Jackson, David Geffen, and Blackstone Group, SCA acquired EMI Music Publishing for $2.2 billion from Citigroup. The company's Sony/ATV Music Publishing, which owns more than 750,000 copyrights, now oversees EMI Music Publishing and its 1.3 million copyrights on behalf of the investor group. (Sony/ATV Music Publishing is co-owned by subsidiaries of SCA and trusts formed by the Estate of Michael Jackson.) – less