Mobile not a key growth driver for Sony; explores “potential alliances with other companies”

Sony has outlined its three-year corporate strategy plan to the market, looking at FY15 to FY17 (year ending 31 March 2018). It will use Return on Equity (RoE) as the primary KPI (key performance indicator) as it targets a group RoE of 10% in FY17.

Key strategies to achieve this include 1) the emphasis on profitability, rather than pursuing volume, 2) greater autonomy for each business with a focus on shareholder value and 3) a clearly defined position of each business within the larger group portfolio.



In terms of the latter, it has grouped its businesses under three characteristics including “Growth drivers”, “Stable profit generators” and “Areas focusing on volatility management.” Mobile sits in the last category (along with the television business). This means it expects a challenging competitive landscape and will place the “highest priority on curtailing risk and securing profits“.

Therefore expect, sales declines, a lower level of invested capital and profits in part to be driven by efficiency gains rather than top-line growth. Sony also confirmed for the first time that it will “continue to explore potential alliances with other companies” in mobile, highlighting a potential partnership with another company or even a possible sale of the business.

Sony sees the “Growth drivers” of its business being its Devices segment (CMOS image sensors), PlayStation, Pictures and Music. The “Stable profit generators” are the Imaging Products & Solutions and Video & Sound segments. See the full comment on mobile below.

Sony comment on Mobile business

“The TV and Mobile Communications businesses operate in markets characterized by high volatility and challenging competitive landscapes. In view of this business environment, Sony will place the highest priority on curtailing risk and securing profits in its operation of these businesses. Since both markets are experiencing intense cost competition and commoditization, Sony will strive to further increase the added value of its products by leveraging its in-house technologies and component devices. By carefully selecting the territories and product areas it targets, Sony will seek to limit its capital investment and establish a business structure capable of securing stable profits. The Company will also continue to explore potential alliances with other companies in these areas, in response to changes in the business landscape.”

Thanks Arthur and Hendra!