Sony 2004 Annual Report Download - page 67

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The year on year decrease in sales was due
to a significant decrease in intersegment sales
to the Game segment as a result of the out-
sourcing of PlayStation 2 game console pro-
duction to third parties in China. Sales to outside
customers on a yen basis increased 4.7 percent
compared with the previous fiscal year.
Regarding sales to outside customers by
geographic area, sales on a yen basis increased
in Japan by 11 percent, in Europe by 10 percent,
and in non-Japan Asia and other geographic
areas (“Other Areas”) by 8 percent. Sales on a
yen basis in the U.S. decreased 7 percent.
In Japan, mainly due to the strong sales of
Sony Ericsson, sales of cellular phones, prima-
rily to Sony Ericsson, increased significantly. In
addition, sales of charge coupled devices
(“CCDs”), which benefited from an expansion
in demand mainly from digital still cameras,
DVD recorders (including PSX), plasma and
LCD flat panel televisions, and broadcast- and
professional-use equipment increased. On the
other hand, sales of PCs and CRT televisions
decreased. In Europe, sales of digital still
cameras, flat panel televisions, cellular phones,
and PCs increased significantly. Sales of CRT
televisions, portable audio, Aiwa products, and
home audio, however, decreased. In Other
Areas, sales of CD-R/RW and DVD+/-R/RW
drives, digital still cameras, PCs, and video
cameras increased while sales of CRT televisions
decreased. In the U.S., a significant decrease in
the sales of CRT televisions combined with de-
creased sales of Aiwa products, computer dis-
plays, set-top boxes, and personal digital
assistants to cause a decline in sales, but sales
of flat panel televisions, projection televisions,
digital still cameras and PCs increased.
Performance by Product Category
Sales and operating revenue by product cat-
egory discussed below represent sales to cus-
tomers, which do not include intersegment
transactions. Refer to Note 24 of Notes to
Consolidated Financial Statements.
“Audio” sales decreased by 58.9 billion
yen, or 8.6 percent, to 623.6 billion yen. Sales
of home audio declined due to a contraction
of the market and increased price competition.
Regarding headphone stereos, sales declined
primarily due to falling prices, but the unit
shipments of both MD format and CD format
devices slightly exceeded their levels in the
previous year. Worldwide shipments of MD
format devices increased by approximately
40,000 units to approximately 3.36 million
units and worldwide shipments of CD format
devices increased by approximately 240,000
units to approximately 10.96 million units. On
the other hand, sales of car audio increased
due to strong sales in the European market.
“Video” sales increased by 97.0 billion yen,
or 11.4 percent, to 948.1 billion yen. In addition
to a significant increase in the sales of digital
still cameras outside of Japan, sales of DVD
recorders (including PSX) increased significantly
primarily in Japan. Worldwide shipments of
digital still cameras increased by approximately
4.4 million units to approximately 10 million
units. Worldwide shipments of DVD recorders
were approximately 20,000 units in the previ-
ous fiscal year but increased to approximately
650,000 units in the fiscal year ended March
31, 2004. Regarding home-use video cameras,
worldwide shipments of combined analog and
digital devices increased by approximately
850,000 units to approximately 6.6 million
units, but overall sales increased only slightly,
as sales in Japan and the U.S. decreased due to
increased price competition. DVD-video player
sales decreased due to pricing pressure,
although unit shipments increased.
“Televisions” sales decreased by 33.0 billion
yen, or 3.5 percent, to 917.2 billion yen. Sales
of CRT televisions decreased significantly due
to a contraction of the market and declining
prices, resulting primarily from a shift in
demand to flat panel televisions. Worldwide
shipments of CRT televisions decreased
approximately 600,000 units to approximately
9.4 million units compared with the previous
fiscal year. Sales of computer displays also de-
creased worldwide. On the other hand, sales
of plasma and LCD flat panel televisions in-
creased significantly worldwide and sales of
projection televisions in the U.S. increased.
Worldwide shipments of flat panel televisions
increased approximately 480,000 units to
approximately 640,000 units.
“Information and Communications” sales
decreased by 2.0 billion yen, or 0.2 percent, to
834.8 billion yen. Despite a decrease in sales in
Japan, due to price declines in the notebook
PC market, overall sales of PCs increased as
sales in all regions outside of Japan increased.
Worldwide unit shipments of PCs increased
approximately 100,000 units to approximately
3.2 million units. Sales of personal digital assis-
tants decreased due to a contraction of the
market and the effects of price declines. Sales
of broadcast- and professional-use products
were almost unchanged year on year as sales
in Japan increased due to the sale of equipment
installed in two new broadcasting stations,
while many broadcasters in the U.S. and other
countries outside of Japan reduced their capital
expenditures.
“Semiconductors” sales increased by 48.5
billion yen, or 23.7 percent, to 253.2 billion
yen. The increase was due to a significant in-
crease in sales of CCDs, mainly reflecting the
expansion of the market for digital still cameras.
Regarding LCDs, sales of low temperature poli-
silicon LCDs for digital still cameras and cellular
phones increased significantly.
“Components” sales increased by 96.0
billion yen, or 18.2 percent, to 623.8 billion
yen. The increase was primarily due to significant
increases in sales of CD-R/RW and DVD+/-R/RW
drives, and Memory Sticks. Moreover, sales of
lithium-ion batteries increased. Sales of CD-R/
RW drives increased due to a production and
sales alliance with a third party, and sales of
DVD+/-R/RW drives increased as a result of the
expansion of the market for those devices.
Worldwide shipments of Memory Stick increased
approximately 12 million units to approximately
31 million units due to the continued, strong
demand for digital still cameras. On March 31,
2004, Sony’s cumulative shipments of Memory
Stick had reached approximately 66 million
units. Regarding lithium-ion batteries, sales for
use in digital still cameras and PCs increased.
-0.0% 0.8%
-0.7%
02 03 04
0
1,000
2,000
3,000
4,000
5,000
6,000
-250
0
500
1,000
1,500
쐽Sales (left)
쐽Operating income (loss) (right)
쑗Operating margin
* Year ended March 31
Sales and operating income (loss) in the
Electronics segment
(Billion ¥) (Billion ¥)