| LAS VEGAS
LAS VEGAS Jan 13 Sony Corp CEO Kazuo
Hirai has weathered a crisis over a cyberattack on its Hollywood
studio and its controversial comedy "The Interview", but his
toughest moment may be just arriving as he prepares a new
business revival plan.
After failing to turn around the storied creator of the
Walkman since taking the helm in April 2012, Hirai and his
deputies are now open to options including sales and joint
ventures for its money-losing TV and mobile phone operations,
company officials familiar with the leadership's thinking say.
Sony, which has cut its earnings forecasts six times on
Hirai's watch, forecasts a 230 billion yen ($1.9 billion) net
loss for the business year to March, and will suspend dividend
payments for the first time, after deep smartphone losses.
Sony management recognises that "no business is forever",
one source told Reuters. Although no deals are on the table,
"every segment now needs to understand that Sony can exit
businesses", he added.
Last year Sony sold its Vaio personal computer business and
spun off its TV operations, cutting 5,000 jobs in addition to
the 10,000 slashed earlier after Hirai took over.
But even as many analysts say further drastic action is
needed, such as a full-fledged exit from TVs, Hirai used last
week's high-profile Consumer Electronics Show in Las Vegas to
push an array of new gadgets, including a super-slim TVs and a
$1,100 Walkman digital-music player.
He stressed the success of Sony's imaging sensors for
cameras and its PlayStation 4, saying the company has sold 18.5
million of the game consoles, putting it ahead of Microsoft
Corp's Xbox One and Nintendo Co's WiiU.
Sony has refused proposals for aggressive action before,
such as a 2013 demand from influential hedge fund manager Daniel
Loeb to spin off part of its profitable entertainment business
to fund an overhaul of the struggling electronics operations.
As he prepares the latest revival plan ahead of the new
business year, Hirai, 54, must decide what to do with the
financially weak operations that have already been subject to
heavy cost cuts.
He told a small group of reporters at the Las Vegas show
that his reforms have succeeded "in some parts but not in
"Electronics in general, along with entertainment and
finance, will continue to be an important business," he said.
"But within that there are some operations that will need to be
run with caution - and that might be TV or mobile, for example."
Yet cost cuts and a focus on high-end phones, a strategy led
by Hiroki Totoki, the new chief of Sony's mobile division,
aren't enough, said Citigroup analyst Kota Ezawa.
"The mobile and TV businesses both require a drastic
overhaul," he said. "Without drastic reforms such as joint
ventures or alliances, they will both be in the red three years
Exiting the TV business would mean heavy restructuring costs
and lost sales. Potential buyers might not want all the
division's assets, let alone at a high premium.
But Japanese rival Panasonic Corp has succeeding in
shifting focus from TVs and DVD players to growth areas such as
advanced driver-assistance systems and high-margin home
appliances under CEO Kazuhiro Tsuga, who took office around the
same time as Hirai.
"Anyone can make TVs these days," Tsuga said after browsing
rival booths at CES. "But you see this in smartphones too, not
Indeed, Sony expects a 180 billion yen impairment charge for
its mobile phone business after struggling to compete with
cut-price Asian rivals and failing to close the gap with Apple
Inc and Samsung Electronics Co in high-end
The same predicament forced Nokia to sell its
mobile phone business to Microsoft and Sony's former JV partner
Ericsson to sell its stake in 2012.
($1 = 118.5000 yen)
(Additional reporting by Reiji Murai; Editing by William
Mallard and Alex Richardson)