Sony 2002 Annual Report Download - page 23

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DIRECTIONS AND PLANS IN FY2002
■Sales decreased 3% because worldwide market prices dropped and demand for semi-
conductors and OEM products like PC peripherals stagnated
■A loss was recorded because of sales decreases, restructuring charges and mobile
phone losses
■Sony Ericsson Mobile Communications (SEMC), a mobile phone handset, 50/
50 joint venture with Sweden’s Ericsson was established in October 2001
■It was also announced that Aiwa would become a wholly-owned subsidiary
in October 2002
REVIEW OF FY2001
■Improve profitability by continuing
restructuring
■Accelerate network strategies by
establishing the Networked AV/IT
platform, maximize total value added by
enhancing coordination of end-use
products and semiconductors/devices,
and build up business models integrating
content and service
■Sales decreased 6% due to decreased sales at an advertising agency
subsidiary in Japan
■A loss was recorded primarily due to losses at location-based entertain-
ment businesses in Japan and the U.S., and at Sony Communication
Network Corporation (SCN)
■Revenue increased 7% because insurance-in-force from individual life
insurance products at Sony Life Insurance Co., Ltd. and insurance-in-force
at Sony Assurance Inc. increased
■Operating income increased 27%. Operating income at Sony Life
increased due to the significant increase in insurance revenue. Sony
Finance International, Inc.’s operating income also increased. Losses at
Sony Assurance decreased. Sony Bank Inc. recorded a loss primarily due to
start-up expenses
■Sales increased 15% due to some strong films, strong DVD software sales
and game show successes
■Operating income increased 27 billion yen, resulting from stronger perfor-
mance in the film slate and DVD software worldwide
■Screenblast™ was launched as a software service that helps users create and
share video sequences over the Internet
■Despite contraction of the global music industry, an increase in digital piracy
and terrorist attacks in the U.S., increased sales in Japan and depreciation of
the yen lifted sales by 5%
■Operating income decreased 2% due to these negative factors and costs
incurred for ongoing restructuring activities
■pressplay was launched in December 2001, in conjunction with Universal
Music Group
■Sales increased 52%, surpassing 1 trillion yen for the first time because of
strong PlayStation 2 (PS2) hardware and software sales
■Profitability improved significantly because PS2 manufacturing cost dropped,
the yen depreciated, and software gross margins increased. PS2 entered into
a harvest stage in the second year since its launch
■PS2 hardware production shipments: 18.07 million units
■PS2 software production shipments: 121.80 million units
■SCN will continue to deepen ties with
other Sony Group companies as it
introduces content designed for
broadband networks with the goal of
becoming the number-one broadband
service provider
■Continue to develop motion picture
franchises while maximizing profitability
with a diverse film lineup
■Improve profitability through further
implementation of restructuring initiatives
■Launch, with other studios, Movielink, a
service to distribute films over the
Internet
■Continue to supply strong new releases
■Improve profitability through further
implementation of restructuring initiatives
■Create business models that secure profit
from digital distribution
■Further spread PS2 hardware and increase the
number of units sold of hit titles to enhance
the positive cycle in which captivating game
software is sold by game developers and
publishers at a regular pace. Work to expand
the platform even more through these efforts
■Steadily develop PS2 network connectivity
to provide a new form of entertainment
such as online games
■Not relying on past accomplishments, but
rather, continuing to provide new types of
products and services appropriate for each
individual’s lifestyle and tastes
At a Glance