The Photo Times: Sony cuts sales target for cameras, smartphones for 2014-15

Sony Corp cut its sales targets for digital cameras,

smartphones and tablets by 13-17 percent for the year to end-March 2015,

but said there were “encouraging” signs of a revival in its electronics

business.

CEO Kazuo Hirai told a press briefing on Wednesday that

Sony would assess a proposal from its biggest shareholder, billionaire

Daniel Loeb’s Third Point LLC hedge fund, that the group should sell up

to a fifth of its music and movies business, which includes artists such

as Adele and hit franchises like “Spider-Man”.

Loeb argues a

partial spin-off of Sony Entertainment would free up cash to help the

struggling electronics division and could boost Sony’s stock price by 60

percent.

Third Point’s “proposal is one that affects a core part

of Sony’s business and the direction of our management, so the Sony

board will give it thorough consideration before replying to Mr. Loeb,”

Hirai said.

Sony has relied on entertainment and insurance profits to offset losses from TVs and other consumer devices.

Sony

shares charged to their highest in more than 2 years on Wednesday after

the Nikkei newspaper said Sony’s board would consider evaluating Loeb’s

proposal. The stock closed up 5.9 percent at 2,290 yen.

Sony

trimmed its 2014-15 camera sales target to 1.3 trillion yen and now

expects smartphone and tablet sales of 1.5 trillion yen.

“While

there are encouraging signs of change, the revival of our electronics

business remains our task,” Hirai said, pointing to strong demand for

Sony’s new Xperia smartphone and mirrorless interchangeable lens

cameras. He said Sony was keeping to its strategy to revive the

struggling business around cameras and mobile and PlayStation gaming

devices.

Hirai, however, slashed his operating profit margin

target for the gaming business to 2 percent in the year to March 2015,

from an earlier outlook for 8 percent.

Sony, which expects

smartphone sales to rise by more than a quarter to 42 million in the

current year to end-March, is battling with China’s Huawei Technologies

and ZTE Corp and South Korea’s LG Electronics

for third place in the $225 billion global market

behind Samsung Electronics and Apple Inc .

For

the current business year, Sony predicts its operating profit will be

around 230 billion yen, little changed from last year when it booked

one-off gains from selling assets including its U.S. headquarters in New

York.

Sony’s overall target for 2014-15 sales of 8.5 trillion yen

and an operating margin of more than 5 percent is unchanged, with Hirai

predicting the electronics business would account for 6 trillion yen of

revenue. By the end of the revival plan, the three core businesses –

cameras, mobiles and gaming – will account for 65 percent of the

electronics division’s sales and 80 percent of operating profit.

Referring

to the lower smartphone sales target, Naoki Fujiwara, a fund manager at

Shinkin Asset Management, said: “It would be better to adjust to a

realistic side rather than staying overly ambitious. In reality, there’s

fierce competition in the smartphone industry.”

Â© Thomson Reuters 2013

Article source: http://www.ubergizmo.com/2013/04/nikon-d7100-hands-on-review/