Sony Corporation has promoted digital cameras up the product portfolio totem pole in naming digital imaging as one of its three ‘core pillars’, along with games and mobile communications (smartphones, tablets and computers).
While Sony has stated TVs will still be an important part of the business, resources will be focussed on the three ‘pillars’ in the new ‘Sony One’ recovery program. Sony is the world’s third largest television maker but has lost $8 billion over the last eight years in this part of its business.
Sony last week slashed its earnings outlook for the fourth time in less than a year, warning that it now expects a 520 billion yen ($6.25 billion) loss – the biggest in its 65-year history- for the last fiscal year, boosted by a tax-related charge from continued losses at its US operations. It has also announced it will shrink its workforce by 10,000 (out of around 170,000).
Sony announced its business unit restructure in a press release in late March and this was re-stated publicly at the first news conference featuring new chief executive Kazuo Hirai, last Thursday, April 12.
Sony will reinvigorate its development of image sensors, signal processing technologies, lenses ‘and other key digital imaging technologies in which it excels’, in both its consumer products and broadcast and professional products businesses.
(Sony made a series of announcements on major new new broadcast and cinema-grade digital video cameras this week.)
Sony is aiming for total sales of 1.5 trillion yen and double-digit operating income margin from the consumer, professional and image sensor businesses by 2014.
COMMENT: Most analysts have expressed disappointment in Sony’s roadmap for recovery, but whether or not it proves successful, the focus on digital cameras should be a benefit to the broader imaging industry in the short and medium term at least. It can be assumed that Sony cameras as a core pillar of the business will be accompanied by an increased marketing spend, which will help promote picture-taking overall.
Sony’s compact camera business and its smartphone business will possibly bump against each other as smartphones substitute for digicams, which may see Sony focus marketing more on its enthusiast offerings – the impressive NEX and Alpha ranges.