Sony Corp iwerwtn Consumer Electronics (World)

SONY CORP IN CONSUMER ELECTRONICS (WORLD)

November 2014

© Euromonitor International PASSPORT 2 CONSUMER ELECTRONICS: SONY CORP

Disclaimer

Much of the information in this

briefing is of a statistical nature and,

while every attempt has been made

to ensure accuracy and reliability,

Euromonitor International cannot be

held responsible for omissions or

errors.

Figures in tables and analyses are

calculated from unrounded data and

may not sum. Analyses found in the

briefings may not totally reflect the

companies’ opinions, reader

discretion is advised.

Sony Corp has been

undergoing a prolonged

turnaround selling off its laptop

division to concentrate on

turning around its smartphones

business unit over 2013 and

2014. However, intensifying

competition and slowing growth

in the smartphones market,

particularly in the high-end

segment have derailed plans to

return to profitability in 2014. In

this profile Euromonitor

International examines the

company’s prospects in

consumer electronics as it

attempts to complete a

turnaround.

Scope

SCOPE OF THE REPORT

Consumer Electronics

In-Home Consumer Electronics

LCD TVs

Home Audio and Cinema

Video Players

In-Car Entertainment

In-Dash Media Players

In-Car Speakers

Portable Consumer

Electronics

Smartphones

Cameras

Wearable Electronics

This report encompasses the operations of Sony Corp and its main competitors

within in-home and portable consumer electronics.

http://www.euromonitor.com/


STRATEGIC EVALUATION

COMPETITIVE POSITIONING

MARKET ASSESSMENT

CATEGORY OPPORTUNITIES

BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


Sony Corp is one of the worlds largest consumer

electronics companies. Aside from consumer

electronics, the company also manufactures

professional use cameras and components such

as image sensors for third parties. Additionally, it

operates a music and film production company as

well as a financial services company operating in

Japan.

Sony’s electronics business has struggled to

achieve profitability since 2007. Intensifying

competition in LCD TVs was the primary reason

for the difficulties. The company has been

attempting to mount a turnaround since 2012 by

divesting and winding down unprofitable units to

focus on smartphones.

However, by 2014 the operating environment in

smartphones deteriorated significantly as

competition intensified and growth rates started to

show significant signs of slowing.

Despite consistently making quality hardware and

a number of successful products, Sony as a

whole remains in a difficult situation.

Sony Corp

Headquarters: Tokyo, Japan

Regional involvement: Global

Category involvement: Portable, in-car and in-home

consumer electronics

Net revenue (FY2014): ¥6,682 billion

Key facts


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Sony Corp: Revenue and Net Income FY2012-FY2014

Revenue Net income




Performance Across Key Electronics Units for Q2 ended

30 September 2013-2014

¥ billion 2014 2013

Mobile Communications

Revenue 308.4 304.6

Operating income -172.0 8.8

Imaging Products and Solutions

Revenue 178.6 175.5

Operating income 20.1 -2.3

Home Entertainment and Sound

Revenue 282.4 263.8

Operating income 8.0 -12.1

Devices

Revenue 247.7 201.3

Operating income 29.6 11.9

Financial assessment


2014 was a difficult period for Sony Corp as

the company struggled with expenses

stemming from the sale of its Vaio business

unit. In Q2, the Mobile Communications

business unit recorded a ¥176.0 billion

impairment of good will as sales of Xperia

smartphones remained lower than the

company expected over 2014.

Outside smartphones, however, the

company’s turnaround efforts have resulted in

rising profitability. Most importantly, operating

income and revenues from image sensors

have driven growth in the Devices business

unit.

Restructuring and lay-offs have also returned

Imaging Products and Solutions as well as

Home Entertainment and Sound to profitability

despite low revenue growth. Overall the

company has made progress in its turnaround

efforts but with a deteriorating environment in

the smartphones market, driving volume sales

and profitability with Xperia smartphones will

remain difficult.




STRENGTHS

OPPORTUNITIES

WEAKNESSES

THREATS

Sony is a major supplier

of image sensors and

other critical electronics

components in the

industry. Research and

production assets in

these areas are a key

strength of the

company.

Vast manufacturing and

R&D resources

Despite the financial

struggles of the

company its Sony

brand name is still

highly valued and

enjoys a reputation for

high quality and

durability.

High-value brand name

Sony’s product portfolio

is skewed towards

categories with low

growth prospects and

falling pricing making

long-term revenue

growth and profit growth

difficult to achieve.

Lack of growth prospects

in electronics

Sony products across

most product

categories are priced

well above the category

average which has

significantly slowed

volume sales.

High prices

Sony’s strength in

digital imaging will

continue to drive

revenue. The imaging

technology can be a

differentiator in the

company’s

smartphones.

Digital imaging

Wearable electronics is

one the biggest growth

prospects. However,

despite being one of the

first companies to market

Sony is yet to make a

device that resonates

with mainstream buyers.

Wearable electronics

Sony Corp profits

remain highly reliant on

yen-denominated costs

and an appreciation of

the currency would be

detrimental to the

company’s financial

standing.

Yen appreciation

Sony Corp revenues

and profitability has

become increasingly

reliant on smartphones

but a slowdown in

demand especially in

developed markets is a

significant risk.

A significant slowdown

in smartphones

SWOT: Sony Corp





Returning to profitability

The company is unlikely to return to profitability without significantly improving the performance of its

smartphone and TV line-ups as these are the single largest revenue generators in the company’s electronics

portfolio. This has been the focus of turnaround efforts and will remain a priority as profitability in both

divisions has been hard to attain.

Sony faces a common problem in both categories. The company’s products are positioned at the higher end

of the price spectrum, but demand is driven by lower-priced models. This limits volume sales causing capital

underutilisation and financial losses.

Therefore Sony needs to also pursue alternative sources of growth. The company looked to medical devices

and other areas, but within consumer electronics only wearable electronics offer any significant volume and

value growth rates. The Sony Smartwatch was among the first smartwatches to appear on the market, but

like many of its competitors it has struggled to gain mainstream acceptance.

At the company level, Sony’s strategic vision of One Sony, at the centre of its turnaround, has not been

properly executed. The company’s product portfolio and technologies lack continuity and often operate

separately from each other rather than creating synergies. Correcting this and achieving a company

structure with a narrower and more interconnected product portfolio remains Sony’s greatest challenge and

opportunity.

Key strategic objectives and challenges






MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


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Global Volume Share of Sony Corp in Key In-Home Electronics Categories

2009-2013


LCD TVs

Video Players

One of the biggest challenges in turning around

Sony Corp has been the consistent lack of

profitability in the company’s home electronics

division. This is largely due to weakness in LCD

TVs where Sony Corp has been losing ground

since 2009. Over 2009-2013, demand for LCD TVs

became increasingly dependent on emerging

markets. However, Sony’s models were priced

above competing Korean models rendering the

company unable to take advantage of dynamic

growth in emerging markets.

The shift in demand to emerging markets gave rise

to a large number of Chinese and local brands

which sold televisions at prices below those of the

competition. The trend spread to developed

markets where brands such as Vizio, in the US,

have become increasingly popular, squeezing out

more expensive competitors.

Sony Corp managed to increase its share in the

rapidly declining market for video players and

maintained a 20% share in home audio and

cinema, but this was insufficient to offset losses in

its TV business.

Sony Corp weighed down by LCD TVs in in-home electronics





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Global Volume Share of Top Five Camera Manufacturers 2009-2013

Canon Inc

Nikon Corp

Fuji Photo Film CoLtd

Sony Corp

Samsung Corp

Camera-enabled smartphones have been

depressing demand for cameras over the

review period and have rendered

camcorders a niche category. Sales of point

and shoot cameras have been affected

most of all as the image quality and feature

set in most cases does not exceed those of

mid to high-end smartphones.

In this environment, companies with the

biggest presence in interchangeable lens

cameras have been most successful.

Therefore Canon Inc and Nikon Corp have

been gaining share in the shrinking

cameras market. While Sony Corp also has

a wide portfolio of interchangeable lens

cameras, sales have lagged behind due to

their higher prices compared to the

competition. Sony’s cameras business

represents a small proportion of the

company’s revenue, but remains a

significant part of its overall strength as a

leading image sensor supplier in

smartphones.

Sony Corp loses ground in a shrinking cameras market





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Sony Corp: Volume Share in Smartphones in Selected Markets 2013

Sony Corp bought out Sony Ericsson Mobile Communications AB in 2012 in the hopes of building a

company-wide turnaround on the back of rising smartphones sales. However, its global volume share in

smartphones stood at 3.6% in 2013, and it was a niche brand in some of the world’s largest and fastest-

growing smartphones markets.

Upon the buyout, Sony Corp drastically re-designed its line-up to be more competitive in terms of features

and aesthetics but pursued a pricing strategy similar to the one it employed in TVs and other product lines.

The product portfolio was skewed towards high-priced devices, and volume sales suffered as a

consequence. While the company saw some signs of recovering sales in 2013 intensifying competition has

made gaining share impossible in 2014.

Sony remains a niche brand across most markets with Japan and parts of Europe being its strongest

markets.

Sony Corp in smartphones





Like many of its biggest competitors Sony Corp

has entered the wearable electronics market in the

hopes of making this product line its next major

revenue generator.

In 2013, Sony Corp was among the first large

electronics companies to enter the market, but

through 2013 and into 2014 wearable electronics

was dominated by smaller companies focused on

wearable technology. Fitbit, Nike and Jawbone

lead volume sales with simple, relatively

inexpensive passive fitness trackers.

Within autonomous wearable electronics, Pebble

remained the biggest brand by retail volume share.

Sony’s smartwatch as well as similar entries from

Samsung were not received well by the general

public and early adopters opted for products from

smaller manufacturers in 2013.

Lack of software specifically designed for wearable

electronics was largely to blame for the lack of

mainstream adoption of more complex devices

such as the Sony SmartWatch in 2013.

Early entrant into wearable electronics


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Global Volume Share of Top Five Manufacturers in Wearable Electronics 2013

Fitbit Inc

Nike Inc

Jawbone

Pebble TechnologyCorp

Sony Corp

Others




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Global Volume Share of Top Five In-Dash Media Players Manufacturers 2013

Pioneer Corp

JVC Kenwood Corp

Sony Corp

Alpine Electronics Inc

Coagent Electronic S&T Co Ltd

Others

Sony Corp was the third largest

manufacturer of aftermarket in-dash

media players in 2013. Its position in the

market has seen little change over the

review period. The competitive landscape

in in-car entertainment is far more stable

than in other categories largely due to the

very long replacement cycles in in-car

entertainment.

Unlike in its other product categories,

Sony Corp has a product portfolio that

spans a wide price spectrum. Its products

are priced on a par with most competing

brands and tend to be less expensive than

some similar Alpine and Pioneer models.

This has made the brand popular in both

developed and emerging markets.

In-dash media players are Sony’s main

product in in-car entertainment but it also

had a 9% global volume share of in-car

speakers in 2013.

Sony Corp in in-car entertainment






MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


After a slight rise in LCD TV demand in 2014, due to the FIFA World Cup, sales are expected to decline in 2015. However, overall digital TV volume sales are predicted to grow by 6% over 2013-2018, with sales of LCD TVs expected to show robust growth of 9% over the period.

LCD will remain the dominant projection technology for the foreseeable future, as plasma production falls and OLED take-up will remain slow.

Panasonic Corp was first to announce the cessation of plasma TV production in 2013. Samsung Corp followed in 2014. LG Corp - the last remaining manufacturer - is likely to follow suit in late 2014/early 2015. The proliferation of OLED TVs will be slowed as panel makers focus on displays for fast-growing categories such as smartphones and tablets. Sony was the first company to launch an OLED TV, but by 2014 entries from Samsung and LG were dominating the nascent market. Sony has since suspended production of OLED TVs to focus on LCD models.

While sales of OLED TVs are expected to grow, the low prices of LCD TVs will keep them the biggest TV projection technology over the forecast period.

OLED TVs making inroads but LCD TVs remain in the lead

MARKET ASSESSMENT

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Digital TV Sales by Type 2013-2018

Plasma TVs OLED TVs LCD TVs




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Global Sales of Video Players by Market Type 2013-2018

Developed Markets Emerging Markets

Sales of video players continued to decline across both developed and emerging markets. There are

growing content consumption options for consumers. The rise of legal streaming services such as Netflix in

developed countries, along with content piracy prevalent in both developed and emerging markets are

depressing demand for video players globally.

Therefore, as sales of DVD players continue to plummet, BD players are falling short of making up the

difference. Volume sales of BD players are expected to peak in 2015 and start to decline thereafter.

Despite the decline in demand, video players will not vanish completely, as large segments of consumers

have DVD and BD collections that they would like to be able to continue viewing using optical media

players.

Video players declining across the board

MARKET ASSESSMENT

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Global Sales of Video Players by Product Type 2013-2018

BD Players DVD Players Others




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US

China

Months

Absolute Change in Replacement Cycle Length:

China vs US 2010-2014

Home Audio and

Cinema

Digital TVs

In China, the availability of online content is making digital TVs less of a necessity, which has slowed adoption rates, but consumers with digital TVs have been replacing them at a constant pace. This is prevalent across many emerging markets. Audio content consumption is becoming an increasingly personal experience, which has been depressing the penetration rates of home audio and cinema. Replacement rates have, however, picked up as the proportion of audio enthusiasts in the installed base has increased.

In the US, penetration rates remained steady as online content consumption gained popularity, but usage of home audio and cinema has declined leading to longer replacement cycles. In digital TVs, multiple set ownership drove sales of small, low-cost units, shortening the replacement cycle.

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Penetration Rates in In-Home Electronics: China 2010-2014


Digital TVs

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Penetration Rates in In-Home Electronics: US 2010-2014


Digital TVs

Diverging underlying dynamics behind slow growth

MARKET ASSESSMENT




Upgrading speakers and in-dash media players gives consumers a way to upgrade their vehicles post-purchase at a relatively low cost compared to factory-installed options. This is especially true of in-dash media players. Therefore, volume sales of in-dash media players and in-car speakers are expected to continue growing in emerging markets over the forecast period.

Automotive circulation is stagnating in developed markets, while demand for aftermarket in-car entertainment has been declining and is expected to continue to do so over the forecast period. The number of vehicles with advanced in-car entertainment systems is growing rapidly, as features such as navigation are becoming commonplace even in mid to economy vehicles in developed markets. The trend is expected to accelerate in the US, where manufacturers are already expanding the availability of rear-view cameras and centre console displays in the lead up to 2018, when these features will be mandatory. This makes installing aftermarket in car entertainment equipment often redundant, thereby depressing demand.

Diverging trends in in-car entertainment

MARKET ASSESSMENT

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Total Volume Sales of In-Car Entertainment by Category in Emerging

Markets 2013-2018

In-Car Speakers In-Dash Media Players

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Total Volume Sales of In-Car Entertainment by Category in Developed

Markets 2013-2018

In-Car Speakers In-Dash Media Players




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Sales of Smartphones by Region 2013-2018

Rest of the World

Middle East andAfrica

Rest of Asia

China

Western Europe

North America

By 2014, volume sales of smartphones in developed

markets started to stagnate, as there are few

consumers left who want a smartphone but do not

have one. Some growth is still likely though, as the

selection of feature phones in these markets declines,

along with smartphone prices. Further growth is likely

in North America due to a shortening of smartphone

replacement cycles as a consequence of the shift

towards pre-paid lines.

Consequently, emerging markets will be the main

driving force in smartphones over the forecast period.

Even as volume sales growth in China slows in the

long run, vast populations in emerging markets in

Latin America, Asia Pacific, and the Middle East and

Africa will continue shifting from feature phones to

smartphones.

Growth in volume sales will be driven by middle- and

low-income households in emerging markets, leading

to an accelerating shift towards low-cost models. This

will benefit low-cost brands such as Huawei and ZTE,

as well as companies such as Samsung with product

portfolios spanning a wide price range. Apple Inc will

need to remain dominant in core developed markets.

Smartphones growth driven by Asia Pacific

MARKET ASSESSMENT




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Smartphones by OS Globally 2013-2015

Windows iOS Android Other

Windows gaining traction with highest growth

MARKET ASSESSMENT

Global retail volume sales of smartphones are

expected to post a CAGR of 12% over 2013-2018 and

total volume sales will exceed 1.3 billion in 2015.

Android smartphones are expected to capture up to

77% of the market in 2015. However, compared to

2012-2013, the growth rate for Android smartphones

has significantly slowed to 19% in 2013-2014. In

emerging markets, growth of Android smartphones

has accelerated by capturing consumers who are

upgrading their mobile phones from feature phones to

smartphones.

Windows smartphones are gaining traction as market

share for iPhones begins to slip. The product retains

users but high prices prevent it from gaining wider

audiences especially in emerging markets. From 2013

to 2015, volume sales of Windows smartphones are

expected to increase 95% to 107 million units. In

2014, Microsoft added nine new Windows Phone

partners with the majority originating from emerging

markets. As a result, the penetration of Windows

smartphones into the low-cost smartphones segment

may threaten to loosen the stronghold of Android over

the market.





MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


As consumer camcorders become a niche market for enthusiasts, and fixed lens camera volume sales

decline, manufacturers have turned to interchangeable lens cameras for revenue growth. This has resulted

in price reductions for interchangeable lens SLR and compact system cameras, spurring uptake in both

developed and emerging markets. Sony and its competitors are also incorporating larger sensors and

advanced feature sets into their fixed-lens models to differentiate them from smartphones. The overall

effect of this has been an increase in unit prices and declining volume sales globally.

For Sony Corp, the importance of its camera business extends to a wide range of product categories as its

image sensor technology is incorporated into its smartphones as well as sold to other smartphone

manufacturers. Therefore growing capabilities in image capturing technology needs to be the company’s

top priority. So despite slowing overall volume sales, cameras remain an important product line.

Digital cameras remain important despite declining sales


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Compact System Cameras 2014-2018

Volume Sales of Interchangeable Lens Cameras by Type 2014-2018




Initially, growth in wearable electronics will be

driven by simpler passive wearable electronics,

with a shift towards more capable autonomous

wearable electronics expected over the forecast

period. Both types of devices will collect user data,

but autonomous devices will also provide output

and allow users to interact directly with the device.

For these products to gain mainstream acceptance

they will need to function with minimal input from

the user, relying on information about the

surroundings and the use case to generate output.

This represents a tremendous opportunity for

companies with sensor production and integration

capabilities. Through 2014 and 2015 passive

wearable electronics are expected to dominate the

market. These will mainly be fitness-orientated

devices utilising accelerometers and biometric

sensors. However more advanced, autonomous

devices will require a wider array of sensors

including light and imaging sensors to access

surroundings and deliver contextually relevant

content without user input.

Concentrate on sensor technology in wearable electronics


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Global Volume Sales of Wearable Electronics by Type 2012-2018

Passive Wearable Electronics

Autonomous Wearable Electronics




Smartphones remain the largest growth driver in

consumer electronics despite slowing growth in

2014-2015. Volume sales of Android smartphones

are expected to reach over one billion units in

2015. However, as growth slows competition is

intensifying and product differentiation becomes

increasingly important.

Sony Corp has had difficulties competing with

Samsung, Nokia, and other smartphone

manufacturers, but by 2014 a number of new

strong brands started to present a growing threat.

Chinese brands such as Xiaomi, Huawei and ZTE

started to expand in the global market with

increasingly high-quality smartphone models.

This has been depressing prices and in the face of

growing competition declining prices are

unavoidable. Therefore to stay profitable Sony

Corp needs to grow volume sales and this can only

be achieved with significant expansion in low-cost

models and cutting prices in all price segments

Across the entire price range the company needs

to focus on camera quality to differentiate itself.

Imaging as a key differentiator in smartphones


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Sales of Android Smartphones 2011-2015




In most of its product lines Sony

Corp has been focused on high-

priced models prioritising product

quality and margin over volume

sales. This has rendered the

company unable to take

advantage of the dynamic

growth in demand for consumer

electronics in emerging markets.

To return to profitability the

company needs to grow volume

sales across all of its product

lines and with growth expected

to be driven by emerging

markets, products aimed at

mainstream consumers in

developing countries need to

take priority.

Low-cost products are also

becoming increasingly popular in

developed markets especially as

replacement cycles continue to

shrink.

Expand in emerging markets


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Retail Value Sales of Consumer Electronics: Emerging vs Developed Markets 2009-2018

Emerging Developed





MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


Bravia represents Sony’s brand of LCD televisions. In 2014, the division was spun off into a wholly-owned

subsidiary as part of a turnaround plan. Sony Corp has struggled to turn a profit in televisions as its product

range tends to be priced above most competing brands, which has limited volume sales especially in

emerging markets.

Xperia covers Sony’s range of smartphones and Android tablets. Products in these lines were meant to

drive growth at Sony Corp, but much as in televisions the products were well reviewed, but priced above

competing brands.

Vaio: This brand represented Sony’s range of laptops and laptop-tablet hybrids through 2014 when it was

spun off into an independently-operated Vaio Inc, with a 95% stake sold to Japan Industrial Partners. The

new company does not compete on the global market, but maintains a presence in Japan.

Within cameras Sony Corp has three sub-brands, but across all three the company’s products are priced

above most competing models. The main competitive advantage of Sony products is the company’s

proprietary translucent sensor technology which allows for faster focusing especially in DSLR models.

Alpha: Originally representing DSLR cameras, the brand was expanded to micro-system cameras in

2013 after the NEX sub-brand was discontinued.

NEX: Until 2013, NEX covered Sony’s range of micro-system cameras; this brand was discontinued in

2013 and products were marketed as Alpha E-mount.

CyberShot encompasses the company’s fixed-lens cameras and unique lens-style cameras designed to

work with smartphones. While demand for fixed-lens cameras has been declining, Sony Corp has had

success with advanced, large-sensor, fixed-lens cameras in the RX range by marketing them as a

capable yet convenient-to-use alternative to interchangeable lens models.

Key sub-brands and product lines

BRAND STRATEGY





MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


Sony Corp has been struggling with low volume sales and underutilisation of capital in many of its product

lines. Consequently, the company has been selling off a number of assets and undertake a series of cost-

cutting measures:

As part of its One Sony transformation plan, Sony closed its factory in Minokamo, Japan in 2012. In

addition, Sony has been selling off its television factories globally as part of its initiative to improve

profitability and reduce overheads.

Sony sold its factories in Slovakia and Spain to third parties in 2010, and the company continues to shed

manufacturing facilities globally as it looks towards original equipment manufacturers (OEM) to help

manufacture its products.

Sony has also shifted production of its SLRs (Alpha range) and compact system (NEX range) cameras

from Japan to Thailand, in a bid to reduce product costs and cater to the growing demand in the region.

In 2013, Sony Corp sold its US headquarters building in New York City to Chetrit Group for US$1.1 billion.

In 2014, Sony Corp spun off its computer business (excluding Xperia Android tablets) into an

independently-operating Vaio Inc and sold a 95% stake in the company to Japan Industrial Partners,

retaining a 5% interest in the company.

Also in 2014, Sony Corp spun off its television business into a wholly-owned subsidiary. As part of the sale

and reorganisation of Vaio and Bravia business units, the company reduced its workforce by 5,000.

Scaling down at Sony Corp

OPERATIONS





MARKET ASSESSMENT


BRAND STRATEGY

OPERATIONS

RECOMMENDATIONS


Image sensor technology is one

of Sony Corp’s most valuable

assets. Its image sensors are

used in a wide range of flagship

smartphones of competing

brands.

The technology needs to be

expanded to applications in

wearable electronics and in-car

entertainment moving beyond

image capturing and into

creating hardware for contextual

awareness-enabling sensor

arrays.

Sony sensors in everything

Most crucial to Sony’s short- to

mid-term performance is

increasing volume sales of

televisions and smartphones.

With volume demand

increasingly reliant on emerging

markets the company needs to

offer aggressively priced

products across all of its lines.

This is especially true in

smartphones where a growing

number of low-cost brands have

not only come to dominate

emerging markets but are

starting to make inroads in

developed countries in 2014.

Emerging markets

Sony Corp has decided to

suspend operations in OLED

TVs in 2014 to focus on LCD

TVs. With sales of digital TVs

showing few prospects for

growth in developed markets,

expensive OLED TVs have

limited short- to mid-term

revenue and profit generation

prospects.

However, OLED screens are

proliferating in smartphones and

tablets. As OLED usage

increases Sony risks being left

behind.

OLED screens

Build product lines around component lines

RECOMMENDATIONS

Sony Corp is a company that has been focused on high-quality, premium-priced products which has hurt its

volume sales as globally prices for televisions, cameras, computers and smartphones declined. Consumer

electronics has become a low-margin hardware business and returning to profitability requires growing

volume sales. To do so Sony Corp needs to produce critical components in quantities far exceeding its own

needs to provide revenues for research and development and lowering per unit costs for its own products.




The forecast period under review subsumes the years 2014 through to 2018, inclusive. All forecast retail value data cited in this report are expressed in constant terms unless otherwise stated; inflationary effects are discounted. All historical data, country-specific, regional and global, through to 2013 are also expressed in constant value terms, with any inflationary effects discounted.

Historic value data are given in US dollar fixed 2013 exchange rates, unless otherwise stated. “Researched markets” refers to the 46 markets directly researched by in-country analysts. Global and regional data include sales in modelled markets.

Data parameters

REPORT DEFINITIONS




Laptops: Personal computers (PCs) meant for mobile use and incorporating an external power source, usually a rechargeable battery pack.

Tablets and Other Portable Computers: Portable computers primarily using touchscreen interfaces with screens larger than 7”.

LCD TVs: TVs that use liquid crystal display (LCD) panels with backlighting. Backlighting technology can be via conventional fluorescent light or LED.

Smart TVs: Televisions with built-in internet connectivity, wired or wireless. Home Audio and Cinema: Consists of audio separates, home cinema and speaker systems, hi-fi systems, other home audio and cinema, digital media player docks and speakers.

In-Car Speakers: Permanently-mounted aftermarket speakers designed for automotive use.

In-Dash Media Players: Includes all aftermarket in-car radio cassette players, in-car radio players, in-car

CD players and in-car DVD players.

Smartphones: Any device capable of voice communication over a cellular network. A smartphone must

have an identifiable operating system (eg Android, BlackBerry OS, iOS, Symbian, Windows), allow

installation of software applications (apps), and a screen size of <7”.

Digital Cameras: Cameras that store images in digital format. Point and shoot, micro-system and DSLR

cameras are all included. Accessories such as tripods, lens and memory cards are excluded.

Camcorders: Devices with the primary function of capturing video footage. Includes devices with added

secondary functionality of taking still photos

Wearable Electronics: Electronic devices designed to be worn by the user, typically on the wrist or head.

The category only covers products designed for retail sale and consumer usage. Excludes products

designed for use in medical, military and any other profession.

Product definitions

REPORT DEFINITIONS



FOR FURTHER INSIGHT PLEASE CONTACT Mykola Golovko

Senior Analyst - Consumer Electronics

[email protected]


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Sony Corp iwerwtn Consumer Electronics (World)

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