SONY TO OUTSOURCE 40% OF TV OUTPUT TO REGAIN PROFITABILITY

Sony Corp. (TSE:6758) is seeking to turn its money-losing television business around by increasing outsourced production to 40 per cent in fiscal 2010 under a three-year business plan announced Thursday.

Outsourced TV production will likely account for roughly 20 per cent of total in fiscal 2009. By relying more heavily on outsourcing for development and production, the company aims to reduce costs. The business plan calls for boosting its LCD TV global market share to 20 per cent in fiscal 2012 from 13.9 per cent in 2008.

Sony will cut costs deeper in its game business, which has also been bleeding red ink. Sony has already reduced the cost of its PlayStation 3 console, but plans to lower it another 15 per cent in fiscal 2010.

The company will focus more on growth fields, such as lithium ion batteries and services using the Internet. It will invest about 100 billion yen in lithium ion battery operations over the next several years, with an eye toward entering the automotive battery market.

Sony will launch an online service delivering movie, music and book content to such devices as TVs and portable music players, targeting 300 billion yen (US$3.4 billion) in annual sales by fiscal 2012.

And next year, the firm will introduce TVs and game consoles compatible with 3-D technology. Including equipment for broadcasting stations, the goal is to generate more than 1 trillion yen in sales for these products.

In June 2008, Sony unveiled plans to invest 1.8 trillion yen in strategic areas over a three-year period. But earnings deteriorated rapidly amid a global economic downturn. The firm conducted a management shake-up in April, with Chief Executive Howard Stringer taking over as president to right the struggling electronics division.

For fiscal 2009, Sony expects to report an operating loss of 60 billion yen, a slight improvement from its initial forecast and marking its second straight annual loss.

(Nikkei) bl

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