Sony prepped for pivot to growth, CEO says

Sony President Kazuo Hirai

TOKYO -- After four years on the reform path, Sony President Kazuo Hirai has at last declared the electronics and media giant primed for new growth with the help of a leaner, sturdier corporate structure.
About-face
The chief executive was a model of positivity at Sony's annual corporate strategy meeting Wednesday, talking bold new concepts and development plans. "We are shifting gears" away from a "previous emphasis on restructuring, and are now focused on growth," Hirai said.
Sony must "be a vital presence at the 'last one inch,' or the very closest point of contact with our customers," he said. This is part of the drive behind the company's re-entry into the robotics field, exemplified by "a robot capable of forming an emotional bond with customers," according to Hirai. Bold startup investments and collaborative ventures, meanwhile, are aimed at growing the pace of product development. A dedicated startup fund will be set up in July.
The bright, relaxed tone stood in sharp contrast to the gloom that colored Sony's outlook four years ago. Just a day after stepping into the presidency, on April 2, 2012, Hirai told a gathering of new employees that Sony faced "an extremely forbidding business environment." The company closed out the year ended two days earlier at a 456.6 billion yen ($4.44 billion at current exchange rates) group net loss, weighed down by stagnant electronics operations.
Hirai would oversee the sell-off of Sony's chemical segment and the merger of its small-and-midsize-LCD-panel business with that of another company, cutting a total of 10,000 jobs worldwide. But the president stood strong against a withdrawal from television operations from the beginning, despite their eight consecutive years in the red.
On April 12, 2012, when Sony's management plan through fiscal 2014 was unveiled, Hirai called TVs the "core of home entertainment" and a key platform for a variety of services and content. Three years later, that business was in the black, thanks to efforts stressing quality over quantity, including paring down the geographic areas in which the TVs were sold and concentrating offerings on ultrahigh-resolution 4K sets.
New direction
That management plan also kicked off Sony's shift to a three-legged profit structure for its electronics business, resting on digital imaging, games and mobile devices. Digital imaging, which includes cameras and broadcast devices, grew as expected. Revenues from gaming skyrocketed, thanks in large part to the PlayStation 4 console, which went on sale in some overseas markets first in November 2013. More than 40 million units had been sold as of this May.
By May 2014, Hirai was feeling bold enough to declare fiscal 2014 "the year we complete our structural reform" and bring electronics as a whole into the black. Kenichiro Yoshida, former head of Sony unit So-net, had been made chief financial officer a month earlier, after coming on board as chief strategy officer the previous December. Operations were being briskly streamlined, with televisions spun off into a separate company and personal computer operations under the Vaio brand sold off.