Sony: TV stays but we might take help
Sony Corp could take on an equity partner in its TV unit, which has racked up losses every year for a decade, but it is not thinking about selling or exiting the business, its chief executive has said.
Sony plans to turn its struggling TV unit into a separate entity – Sony Visual Products Inc – within a few months to boost transparency. The splitting off of its TV unit had fired up speculation about a sale, which CEO Kazuo Hirai sought to dispel.
“We are not thinking about selling our TV operations or shutting them down or anything like that,” he said. “We’re doing business in the competitive environment of a market. I wouldn’t rule out the possibility of an equity tie-up, but right now we are not doing business under the assumption that would happen.”
“We’re aware of criticism that the TV target of 16 million units this fiscal year is too high,” he added.
Sony, roundly criticised for its habit of making overly optimistic forecasts that it repeatedly fails to meet, has pledged that a blast of restructuring in its electronics division this year will return the troubled unit to profit.
The company said it would be possible to expand operating profit threefold in the 2015/16 business year to 400 billion yen, with its aggressive restructuring expected to yield annual cost savings of 100 billion yen.
Ratings agency Fitch immediately put out a note saying that it recognises the cost-cutting and improvements being made to Sony’s TV business, and which has a target of 16 million unit sales this year (to end March 2015). Sony’s strategy is to hive all of its TV-related operations into a new, stand-alone operation, Sony Visual Products Inc., by July 1 and to then focus on high-end models.
Fitch says it believes it will be a challenge, and places the prospects of achieving TV success as being only 50:50.