Sony Corp iwerwtn Consumer Electronics (World)
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Transcript of 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.
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
CATEGORY OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 4 CONSUMER ELECTRONICS: SONY CORP
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
© Euromonitor International PASSPORT 5 CONSUMER ELECTRONICS: SONY CORP
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
STRATEGIC EVALUATION
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.
© Euromonitor International PASSPORT 6 CONSUMER ELECTRONICS: SONY CORP
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
STRATEGIC EVALUATION
© Euromonitor International PASSPORT 7 CONSUMER ELECTRONICS: 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
STRATEGIC EVALUATION
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OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 9 CONSUMER ELECTRONICS: SONY CORP
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Global Volume Share of Sony Corp in Key In-Home Electronics Categories
2009-2013
Home Audio and Cinema
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
COMPETITIVE POSITIONING
© Euromonitor International PASSPORT 10 CONSUMER ELECTRONICS: SONY CORP
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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
COMPETITIVE POSITIONING
© Euromonitor International PASSPORT 11 CONSUMER ELECTRONICS: SONY CORP
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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
COMPETITIVE POSITIONING
© Euromonitor International PASSPORT 12 CONSUMER ELECTRONICS: SONY CORP
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
COMPETITIVE POSITIONING
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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
© Euromonitor International PASSPORT 13 CONSUMER ELECTRONICS: SONY CORP
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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
COMPETITIVE POSITIONING
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
CATEGORY OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 15 CONSUMER ELECTRONICS: SONY CORP
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
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© Euromonitor International PASSPORT 16 CONSUMER ELECTRONICS: SONY CORP
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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
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Global Sales of Video Players by Product Type 2013-2018
BD Players DVD Players Others
© Euromonitor International PASSPORT 17 CONSUMER ELECTRONICS: SONY CORP
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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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Diverging underlying dynamics behind slow growth
MARKET ASSESSMENT
© Euromonitor International PASSPORT 18 CONSUMER ELECTRONICS: SONY CORP
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
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Total Volume Sales of In-Car Entertainment by Category in Emerging
Markets 2013-2018
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In-Car Speakers In-Dash Media Players
© Euromonitor International PASSPORT 19 CONSUMER ELECTRONICS: SONY CORP
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Sales of Smartphones by Region 2013-2018
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Middle East andAfrica
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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
© Euromonitor International PASSPORT 20 CONSUMER ELECTRONICS: SONY CORP
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Smartphones by OS Globally 2013-2015
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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.
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
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OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 22 CONSUMER ELECTRONICS: SONY CORP
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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Volume Sales of Interchangeable Lens Cameras by Type 2014-2018
© Euromonitor International PASSPORT 23 CONSUMER ELECTRONICS: SONY CORP
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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Passive Wearable Electronics
Autonomous Wearable Electronics
© Euromonitor International PASSPORT 24 CONSUMER ELECTRONICS: SONY CORP
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
© Euromonitor International PASSPORT 25 CONSUMER ELECTRONICS: SONY CORP
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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STRATEGIC EVALUATION
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MARKET ASSESSMENT
CATEGORY OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 27 CONSUMER ELECTRONICS: SONY CORP
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
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
CATEGORY OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 29 CONSUMER ELECTRONICS: SONY CORP
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
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
CATEGORY OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
© Euromonitor International PASSPORT 31 CONSUMER ELECTRONICS: SONY CORP
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.
© Euromonitor International PASSPORT 32 CONSUMER ELECTRONICS: SONY CORP
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
© Euromonitor International PASSPORT 33 CONSUMER ELECTRONICS: SONY CORP
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
© Euromonitor International PASSPORT 35 CONSUMER ELECTRONICS: SONY CORP
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