Sony 2006 Annual Report Download - page 14

Ryoji Chubachi
President and Electronics CEO
Representative Corporate Executive Officer
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As we have seen from the popularity of taking and sending photos
using mobile phones, there is a growing market for products that
capitalize on advances in networking to inspire communication
and enable people to share joy and excitement. Accordingly, we
expect that increases in computing power will make it easier to
add “intelligent” functions.
One aspect of our approach to date that demands critical
reflection is that for many people our network-related products have
perhaps been difficult to use when considering our customers’
lifestyles and environments. With the Internet now reaching into
most homes, changing the way we communicate, we are capital-
izing on advances in electronics technology to boldly introduce
easy-to-use products that are uniquely Sony—that is, they reflect
our unparalleled electronics technologies and entertainment and
service capabilities and are still a half step ahead of their time.
R&D will be essential in supporting Sony’s growth
strategies. Can you tell us a little about your
current R&D policy?
Sony has always distinguished itself through its technologies.
We have identified areas of concentration and will continue to
strategically allocate resources to strengthen technologies and
ensure a leading global position. To support the growth strategies
that are uniquely Sony, it is crucial that we enhance our capabilities
in semiconductors and key component devices, next-generation
display devices and software—all of which reflect an industry shift
toward added value. Of course, we must also reinforce our R&D
organization.
In the area of semiconductors and key component devices,
CCD and CMOS image sensors, in which we are already highly
competitive, will remain a key focus. We will continue also to
strengthen development programs for Blu-ray Disc-related devices,
such as blue-violet laser diodes, that are essential to the realization
of “HD World.”
To promote the development of next-generation display devices,
we established the Display Device Development Group. We will
focus on self-luminous organic light-emitting diode (OLED) displays,
which deliver high-speed response to moving images and excellent
color reproduction and are attracting attention for use in next-
generation thin displays. We have already announced an agreement
with Idemitsu Kosan Co., Ltd., for the joint development of superior
new electroluminescent materials, a move that is expected to
accelerate the creation of advanced displays and further efforts to
commercialize interesting new applications.
For software, we set up the Technology Development Group
to ensure the effective utilization of global resources. The Group
is charged with strengthening software development to ensure
smoother user interfaces in all areas, including middleware,
application programs, codecs (coder/decoders) and digital rights
management (DRM) software.
Reinforcing our R&D structure is not the only important consider-
ation. It is also crucial that our intellectual property, business and
R&D units cooperate to ensure our R&D accomplishments, as vital
intellectual property, are properly protected and effectively utilized.
In closing, can you tell us about your resolve for
revitalizing Electronics?
The first prerequisite to realizing Howard’s “Sony United” mission is
to ensure that the electronics business recaptures its previous
luster. To me, “revitalization” means the reestablishment of a
positive workplace environment, a place where people who are
excited about what they do can work together to identify latent
customer needs and develop, manufacture and deliver products
that are a half step ahead of their time. In other words, revitalization
will allow us to remain a technology-driven company capable of
responding to the expectations of customers for products that
embody the Sony essence. In the period under review, we
launched several products that fit this description, including the
BRAVIA line of LCD TVs—so it was indeed a promising beginning
to the revitalization of our electronics business.
At last September’s Corporate Strategy Meeting, we announced
a target for the Electronics business of a four percent operating
income margin (before restructuring and one-time changes) for the
fiscal year ending March 31, 2008. In the period under review, the
business’ operating margin, while on track,
was still only half that level, but I think that given Sony’s proven
capabilities it is an entirely realistic target. In addition to overall
growth, achieving this target will demand difficult decisions,
including the rationalization of our businesses, the reduction of
administrative staff and the integration and closure of manufacturing
sites. Sony’s shareholders and other stakeholders seek reassurance
that we are making steady progress with the plan we have outlined.
I look forward to reporting solid results a year and two years into
the plan—results that will once again earn us the confidence of our
stakeholders. Expect great things of Sony as we move forward.
April 26, 2006