From X-bit Labs: Sony Corp. has announced significant new measures to address reform of its TV business aimed to return the company to profitability. In a bid to streamline its TV unit, Sony will spin it off, enhance usage of outsourcing and reduce headcount of employees. Finally, Sony will attempt to focus on the high-end of the TV market in order to boost margins.
Sony has been engaged in various cost reduction initiatives for the TV business, as outlined in its TV business profitability improvement plan announced in November 2011. These initiatives include enhancing LCD panel-related cost efficiency and rationalizing R&D expenses, while also strengthening product competitiveness and operational efficiency in order to improve marginal profit ratio.
While Sony now anticipates that its target of returning the TV business to profitability will not be achieved within fiscal 2013 (ends on March 31, 2014) largely due to unexpected factors such as the slowdown in emerging markets and declining currency rates, the reforms executed within the TV business over the past two years are putting the business on a path to turnaround.
In particular, Sony has significantly enhanced product competitiveness and accelerated its shift to high-end models, especially in the area of 4K, where Sony has secured more than 75% market share in Japan (as of the end of December 2013, based on Sony research) and the U.S.. Sony has also taken the number one market share in the US for 4K models (during calendar year 2013, based on revenue).
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