Sony 2003 Annual Report Download - page 125

Consolidated Financial Information 2003
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supplying more attractive new products to the consumer, Sony’s goal is to increase its competitive edge by
strengthening the in-house production of semiconductors and other devices to raise the added value of its products.
In the television business and home video business, demand for new products including flat panel displays, such as
plasma and LCD displays, and demand for DVD recorders is currently increasing rapidly, and Sony is expanding its
product line-up to meet this increase in demand.
In the Game segment, PlayStation 2 holds an exceptionally high share of the global game console market, and
Sony believes that the PlayStation 2 business is still in the harvest stage. Going forward, Sony will invest heavily in
semiconductors for next-generation computer entertainment systems.
In the Music segment, slow worldwide economic growth and the effects of digital piracy and other illegal
duplication have led to industry-wide difficulties. In addition to the reduction of fixed costs through the acceleration of
restructuring initiatives, Sony is also developing new business models to generate profits through the digital
distribution of content.
In the Pictures segment, Sony plans to continue to maximize global motion picture revenues through its strategy
of distributing a diversified portfolio of motion pictures. The expanding DVD home entertainment market is becoming
a more significant source of revenues and profits, both for current releases and for library product. Additionally, to
differentiate itself in the marketplace and to pro-actively address risks of digital piracy, Sony Pictures Digital is
developing broadband network strategies to facilitate the integration between Sony’s hardware and content products
and create protected revenue-generating alternatives.
In the Financial Services segment, Sony Life has recorded satisfactory growth due to an increase in
insurance-in-force, and will continue to provide new products and services to meet the individual needs and
preferences of customers.
In 2006, Sony will celebrate its 60th anniversary. In the next three years leading up to this landmark date, Sony
will invest a total of 1.3 trillion yen in the following initiatives as it establishes a new profit model and accelerates its
transformation into a knowledge- and capital-intensive company.
1) Sony will strengthen its semiconductor business with investments of approximately 500 billion yen over the next
three years. The investments will drive the development and manufacture of key devices such as imaging devices,
a market for which Sony foresees significant growth, and semiconductors, which make use of the latest process
technology, to help form the foundation of its competitive strength in the broadband network era.
2) Sony will increase investment in research and development to enhance the competitiveness of products and will
create a new laboratory to further stimulate content distribution. Investment in the development of mid- to
long-term new technologies over the next three years will total 500 billion yen (excludes expenses for the
development of new product prototypes).
3) In order to transform Sony into a more profitable company, over the next three years Sony expects to incur
approximately 300 billion yen in restructuring costs for a variety of initiatives, including the further pursuit of