In a move that was expected, Sony will sell off its Vaio personal computer business to investment firm Japan Industrial Partners, the company said this morning in Tokyo. Also on the electronics side, the company is continuing with a restructure of its TV business, with plans to spin the division off by July. As a result of the measures, Sony anticipates it will cut 5,000 jobs by the end of the 2014 fiscal year. The announcements were made as Sony reported consolidated financial results for the third quarter ended December 31, 2013, and adjusted its forcast for the fiscal year to a $1.08B loss. That’s compared to a previous estimate of a $295M profit. Restructuring costs of $690M are partly responsible for the revised figures. Overall, sales and operating revenue were up 23.9% to $22.9B, boosted by the new PlayStation 4 game console, which sold more than 4.2M units since its November launch. Operating income was also up to $860M. In the movie division, sales were down 13% on a U.S. dollar basis. Operating income dropped to $231M. The motion picture division saw lower theatrical and home entertainment revenues, despite the strong performance of Captain Phillips and Cloudy With A Chance Of Meatballs 2. The same quarter last year had Skyfall still in theaters while The Amazing Spider-Man and Men In Black 3 were clicking on the home entertainment front. On a U.S. dollar basis, …
Sony Q3 Operating Income Up, Movie Division Down; PC Unit To Be Sold & TV Spun Off Cutting 5,000 Jobs
Sir Howard Stringer, 71, says he will step down at Sony’s annual shareholder meeting and made the announcement in a speech at the Japan Society in New York. Kazuo Hirai, 52 and former head of the PlayStation unit, succeeded him as CEO almost a year ago. Stringer was put in place in June 2005 and under his watch the once great Sony has fallen behind Samsung in manufacturing and Apple in creativity. Now Hirai is trying to save the company by cutting costs and selling assets. Whether Sony’s Culver City entertainment studio will be one of those assets shed now remains a subject of much speculation especially with Stringer’s departure finalized for June. Hirai has denied speculation that Sony could sell the entertainment divisions. Stringer said he would pursue “new opportunities I’ve been presented with lately”. Stringer is also chairman of the American Film Institute. Stringer came from Sony’s entertainment arm and pointed to the company’s movie, TV and music businesses as “models of stable and innovative leadership and consistently profitable”.
Days after settling an email-hacking lawsuit with rival camera makers ARRI, Red Digital today sued Sony Corp for patent infringement. The high-tech camera manufacturer’s complaint (read it here) Tuesday claims that three cameras made by defendants Sony Electronics and Sony Corporation of America “all embody the subject matter claimed in Red’s asserted patents without any license.” The federal court filing adds that “Red is informed and believes and thereupon alleges that the sale of Sony’s unauthorized, infringing cameras has resulted in lost sales, reduced the business and profit of Red, and greatly injured the general reputation of Red.” Alleging two instances of “willful and wanton” patent infringement on technology used in its Red One camera, Red is seeking a court order that its patents are “valid and enforceable” as well as an injunction against Sony’s F65, F55 and F5 cameras to stop their further sale and have them destroyed.
Formed by sunglasses and sportswear billionaire Jim Jannard in 1999, Red’s cameras have quickly become an industry standard in the increasingly digitally based movie business, with the company’s Red One and other products used recently to shoot the likes of The Hobbit: An Unexpected Journey, the Ridley Scott-directed Prometheus, the History Channel miniseries Hatfields & McCoys and the Steven Soderbergh-directed The Informant.
Sony Corp has announced the ascension of Kazuo Hirai to the role of president and CEO, with current chief Howard Stringer to become chairman of the board of directors. The moves were expected as Sony last year expanded Hirai’s duties to oversee all of its all-important consumer products and services business. The Sony press release is below:
TOKYO, Japan – Sony Corporation (“Sony”) today announced that Kazuo Hirai has been appointed as President and Chief Executive Officer, effective April 1, 2012. Sir Howard Stringer, currently Chairman, CEO and President, will become Chairman of the Board of Directors in June, 2012.
Mr. Stringer recommended to the Sony Board of Directors that Mr. Hirai, currently Executive Deputy President, be his successor as President and CEO. Mr. Stringer will continue as Chairman of Sony Corporation until his ascension to the Board Chairmanship, which will become effective upon Board approval following the annual meeting of shareholders in June, when the current Chairman, Yotaro Kobayashi, will retire. Mr. Hirai is also expected to be appointed to the Board at the June shareholders meeting.
Sony Corp. is pulling out of its LCD manufacturing partnership with Samsung, the company announced today. Samsung will pay $939 million for Sony’s share. The S-LCD joint venture was set up in 2004. The move is expected to save Sony about $640 million a year and will allow it to buy LCD panels from other makers at competitive prices. Sony originally invested to ensure a steady supply of LCD panels for its TVs during a periond of shortages. Samsung has surpassed Sony to as the No. 1 seller of TVs. LG is No. 2, Sony is No. 3. Sony’s TV manufacturing operation has lost money for seven straight years. Sony’s movie and TV studio business remains in the black, but the company overall has forecast its fourth straight annual loss. Analysts believe shedding the LCD manufacturing stake is a good move that should allow Sony CEO Howard Stringer to concentrate on turning around Sony’s TV manufacturing business. Stringer previously announced $8.4 billion in acquisitions to bolster profits on mobile phones. Sony still faces a steep uphill battle with its tablet computers designed to compete with Apple’s iPad.
It hasn’t been a good year for Sony, which has been reeling from the Japanese earthquake and tsunami and hacker attacks on its PlayStation Network that the company said will cost it $2 billion in operating profit this fiscal year. Now the problems have reached Howard Stringer’s office: The Sony chairman received 15% less compensation for the 12 months ending March 31, the company said in government filings today, putting his salary and bonuses at $4.3 million (his second in command and likely successor, Kazuo Hirai, also got a pay cut). Sony’s stock has fallen 29% since the earthquake March 11; the company has reported three consecutive annual losses. According to Bloomberg, Stringer has overseen the loss of more than 37% of Sony’s market value over the six years ended March 31 since he was made chairman and CEO.
Granted Japan’s earthquake and tsunami were not Sony chief Howard Stringer’s fault. But everything else that’s going very wrong at that company is. (Bet he wishes he were back at CBS …) Stringer today felt the need to write a very belated letter of apology (below) to PlayStation Network users for the recent PSN data breach and shutdown since April 20. As the fiasco enters its third week, Congress, the FBI and Sony-hired private computer forensic experts are now trying to find the hackers. And there are lawyers … lots lawyers. Several class-action lawsuits have been filed since confidential data for as many as 100 million users may have been exposed and possibly taken. On Sunday, Sony also took down the multiplayer online games on its Sony Online Entertainment network because it appeared compromised. (PSN provides games for downloading, while SOE hosts online games like EverQuest.) It’s supposed to make gamers feel safer that Sony’s currently in the process of overhauling its entire security system. And Stringer promises PSN will be back online in the “coming days.” But, seriously, this sucks:
I know this has been a frustrating time for all of you.
Norio Ohga, the former Sony chairman who helped revolutionize consumer electronics with handheld entertainment devices and who steered Sony into the entertainment biz with the acquisition of Columbia Pictures, died today of multiple organ failure in Tokyo. He was 81. (Sad that the current Sony Pictures Entertainment regime thought so little of Ohga’s passing that they didn’t even bother to inform the Hollywood media in a timely fashion.) Ohga, credited with developing the compact disc, led Sony from 1982 to 1995 after being talented-spotted by Sony founders Masaru Ibuka and Akio Morita while still a university student. Some decisions made during Ohga’s tenure, such as the $5 billion purchase of CBS Records and then the Hollywood studio, were criticized as unwise and costly at the time. But Ohga insisted that “hardware and software are two wheels on a car,” and his focus on music, films, and video games as a way to enrich the electronics business helped create Sony’s success in his era. His own love of music and first career as an opera singer led him to ensure the CD held 75 minutes of music — enough to store Beethoven’s complete Ninth Symphony.
Also, his outgoing persona also made him comfortable with Americans, and he put the first non-Japanese, American physicist Mickey Schulhof, on the Sony board (they both shared passions for ham radios and jet planes), which later paved the way for the hiring of Howard Stringer as Sony Corp’s first non-Japanese chairman. ”It is no exaggeration to attribute Sony’s evolution beyond audio and video products into music, movies and game, and subsequent transformation into a global entertainment leader to Ohga-san’s foresight and vision,” Stringer said today.
Ohga stopped being involved in Sony’s day-to-day business in 2000. But had he been in charge I bet he never would have allowed Sony to become an also-ran to such electronics pioneers as Samsung and Apple as it has become in the last decade. Ohga saw Sony’s big consumer mistake of betting on its proprietary VCR technology of Beta over what became the industry standard of VHS. But that’s why Ohga bought into Hollywood and brought in Schulhof to head Sony USA and its entertainment subsidiaries: so that Sony would never be left out in the cold again by showbiz on such format decisions. With Ohga’s blessing, Schulhof negotiated a compromise between Sony’s proprietary CD technology and other showbiz companies and electronics makers to create a single industry standard. Again this paved the way for the same thing to happen for DVDs and Blu-ray.
Ohga assumed the blame when Schulhof brought in producers Peter Guber and Jon Peters to run Sony Pictures Entertainment, and they and their handpicked execs performed so poorly that Sony Corp took a humiliating $3.2 billion write-down on the studio in 1994. There also was considerable management turmoil inside CBS Records. On the other hand, Ohga with Schulhof oversaw one of the fastest start-ups in Sony’s history, Sony Electronic Publishing, whose CD-ROM compact discs led in market share until the format gave way to new technology as did Sony’s CDs and mini-discs. However, both missed, together with Bill Gates, the Internet phenom. Here is Sony’s official obituary:
Tokyo, Japan – It is with great sadness that Sony Corporation today announced the loss of Norio Ohga, Senior Advisor and former President and Chairman, Sony Corporation. Mr. Ohga passed away at 9:14 AM on April 23, 2011 in Tokyo. The cause of death was multiple organ failure. He was 81 years old. A private wake will be held among family and close relatives, and a company service will take place at a later date.
Commenting on today’s loss, Sir Howard Stringer, Chairman, CEO and President, Sony Corporation said, “When I first joined Sony in 1997, Ohga-san was serving on the frontlines of Sony management as Chairman and CEO. His numerous and successful endeavors were well-known both inside and outside of Sony. Witnessing Ohga-san’s leadership firsthand was truly an honor, and one I continued to enjoy and benefit from in countless ways in the years that followed.
By redefining Sony as a company encompassing both hardware and software, Ohga-san succeeded where other Japanese companies failed. It is no exaggeration to attribute Sony’s evolution beyond audio and video products into music, movies and game, and subsequent transformation into a global entertainment leader to Ohga-san’s foresight and vision.
I offer my deepest condolences on his passing and pray that he may rest in peace.”
As expected, Sony Corp announced that Doug Morris is the new chairman of Sony Music, replacing Rolf Schmidt-Holtz.
The 3D joint venture of Sony Corp., Discovery Communications and IMAX Corporation has announced the first slew of original series and acquisitions that will be part of its inaugural slate. It includes Sony’s 3D theatrical movie Cloudy with a Chance of Meatballs. The channel launches in 2011.
Abandoned Planet Explore the strangest places on earth – entire cities now completely devoid of all humanity. This series of one-hour programs sheds light on why people have abandoned the places they once called home and what happens after they leave. Produced by Flight 33 Productions.
Africa in 3D From Gannet Island and its 100,000 seabirds of the same name sharing one giant rock, the 60,000 flamingos at Kamfers Dam, the Luangwa River and its 30,000 hippos and much more, this series of one-hour programs captures the richness and diversity of the world’s second-largest continent. Produced by Aquavision Television Productions.