Sony 2003 Annual Report Download - page 21

Sony Corporation Annual Report 2003 19
DIRECTIONS AND PLANS FOR NEXT
FISCAL YEAR
■Although certain products such as Cybershot digital still cameras
enjoyed increased sales, a decrease in sales of Aiwa products, VAIO PCs
and other products caused sales to decrease 7% .
■Operating income was recorded, compared with an operating loss in
the previous fiscal year, due to the benefit of restructuring initiatives,
primarily in the Components category, and the contribution to
profitability of digital still cameras, CCDs and other products.
■End of fiscal year inventory decreased 79.6 billion yen.
■Sony absorbed Aiwa by merger in December 2002.
REVIEW OF FISCAL YEAR ENDED MARCH 2003
■Introduce a host of attractive new products
augmented by Sony’s unique technological
assets and key devices. Examples include flat
panel televisions, DVD recorders, video cameras,
digital still cameras, PCs and mobile phones.
■Enhance restructuring in advance of 2006.
■Introduce the PSX, a product fusing Electronics
and Game.
■Sales increased 23% due to increased sales at NACS-related busi-
nesses* and increased sales at an advertising agency business
subsidiary in Japan.
■Operating loss increased primarily due to an increase in expenses
incurred in connection with the creation of a platform business
(including expenses for the development of network technology).
* NACS (Netw ork Application and Content Service Sector) was established in April
2002 to enhance network-related businesses.
■Revenue increased 6% primarily 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 5% primarily due to an increase in
operating income at Sony Life. Sony Life benefited from an increase in
insurance revenue and an improvement in valuation gains and losses
from investments in the general account.
■Highest ever sales were recorded (an increase of 26% ) due to the
strong theatrical and home entertainment performance of releases
including Spider-Man, Men in Black II, xXx and Mr. Deeds.
■Operating income, which increased 89% , also reached a record high
due to the reasons above and higher operating income in the television
business, which recorded restructuring expenses in the prior fiscal year.
■Despite an increase in manufacturing sales of DVD software, sales
decreased 1% due to a decrease in w orldwide album sales caused by
the contraction of the global music market.
■An operating loss w as recorded, compared with operating income in
the previous year, due to an increase in restructuring charges, the
decrease in sales and other factors.
■Restructuring included the closure of a CD manufacturing facility in the
U.S., the consolidation of several distribution facilities outside the U.S.
and the further consolidation of support functions.
■Unit sales of hardware and softw are increased mainly in the U.S. and
Europe.
■Sales decreased 5% due, in part, to strategic price reductions of
hardw are in all major regions.
■Operating income increased 36% because of strong software unit sales
and continued reductions in hardware manufacturing costs.
■PS2 hardware production shipments: 22.52 million units.
■PS2 software production shipments: 189.90 million units.
■NACS will guide the Sony Group to early
realization of a business model that integrates
hardware and content, and will build a
network service which offers customers new
value in the broadband era.
■Continue to identify and implement
restructuring initiatives to maximize efficien-
cies and improve profitability.
■Develop and nurture the next generation of
global superstar artists.
■Expand revenue base through new consumer
friendly music offerings and maximize the
utilization of legitimate digital music services.
■Through increased penetration of PS2
hardware, enhance the positive cycle in which
captivating software titles are continuously
sold by game developers and publishers in all
the regions of the world. Expand the platform
even more through these efforts.
■Continue efforts to develop PS2 network
connectivity and provide a new form of
entertainment starting with online games.
■Continue contributing to the creation of
enterprise value at Sony by utilizing the direct-
to-customer uniqueness of this segment to
offer new “ out of the box” products and
services.
■Further enhance position in motion pictures by
continuing to pursue a franchise strategy.
■Become the pre-eminent independent
television supplier by strengthening core
programs, leveraging library assets and
pursuing targeted new opportunities.
■Create broadband networks to enable distri-
bution of SPE content directly to consumers.