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Hirai remakes Sony in first year as CEO, now must win consumers

Jay Alabaster | April 1, 2013
In his first year as Sony CEO, Kazuo Hirai has remade the company, cutting thousands of jobs, selling off large businesses and core properties, and moving divisions around the world.

In his first year as Sony CEO, Kazuo Hirai has remade the company, cutting thousands of jobs, selling off large businesses and core properties, and moving divisions around the world.

Now comes the hard part, selling electronics.

Hirai officially took the helm on April 1 last year, after Sony closed the books on its worst fiscal year since its founding in 1946. The company booked a nearly US$6 billion loss for the twelve months ending March 31, and said many signature products were struggling, including its Bravia TVs, Vaio PCs, Cyber-shot digital cameras and PlayStation game consoles.

He laid out his agenda in a press conference at Tokyo headquarters less than two weeks later. The normally easygoing Hirai often raised a fist for emphasis, nearly shouting as he faced a standing-room only crowd and promised to return the firm to greatness, as well as profitability.

Hirai faced a skeptical audience in the Japanese press, which had relentlessly criticized the firm in the wake of its record loss with headlines like "Sayonara Sony." He said he would refocus on the hit products that built its legacy, cutting away non-core businesses under the slogan "One Sony."

A year later, the headlines are better.

Sony's flagship smartphone and tablet, the Xperia Z and Xperia Tablet Z, have had strong reviews at home and abroad. The Nikkei business newspaper ran a story called the "Rebirth of Xperia," while Japanese tech publisher Ascii's review was titled "The strong appeal of the truly 'One Sony' Xperia Tablet Z."

Both devices feature screens and specs that can compete with top models from Apple and Samsung, and the tablet is both thinner and lighter. Hirai has said he was involved in the design of both.

Sony launched a major advertising campaign in Japan to coincide with the tablet's launch earlier this month, including free rentals to travelers on the country's high-speed bullet trains. It has also invited analysts to touch-and-try events with the new devices.

Hirai has set a goal of winning the number three spot in global smartphone sales, and in the fourth quarter of last year Sony came close, boosted by new Xperia handsets. Sony had a 4.5 percent market share in units shipped during the quarter according to researcher IDC, leaving it just behind Huawei as the fourth largest manufacturer. Both lag Apple and Samsung, which have half the market.

Analysts are cautiously optimistic.

"Sony did the best they could with the Xperia Z, but it is different from products like the Walkman because it is not something that didn't exist previously," said Yasuo Nakane, who covers Sony at Deutsche Bank in Tokyo.

Last August, Hirai moved the mobile division from Europe, where it had sat as a legacy of the Sony Ericsson Mobile joint venture, to company headquarters in Tokyo. The company now launches its Android phones and tablets under the Xperia brand, but it also sells Vaio tablets that run Windows and older tablets under a "Sony Tablet" line.

 

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