Sony 2011 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... Dear Shareholders Operating Results in Fiscal Year 2010 Focus Areas for Growth Networked Products and Services 3D World Competitive Advantages through Differentiated Technologies Emerging Markets 06 Networked Products and Services 10 3D World Expanding 3D World 12 Competitive Advantages through...

  • Page 3
    ...Section 64 Stock Information 65 Investor Information ©2011 Columbia Pictures Industries, Inc., All Rights Reserved. For more information on Sony's financial performance, corporate governance, CSR and Financial Services business, please refer to the following websites. 2011 Annual Report on Form...

  • Page 4
    Letter to Shareholders: A Message from Howard Stringer, CEO 02

  • Page 5
    ... by Sony Music Entertainment with other music majors. Between these and many other charitable activities, including corporate donations of cash and countless Sony products as well as sending volunteer employees to the affected regions, the Sony Group has contributed to the rebuilding of East Japan...

  • Page 6
    ... and video products into music, movies and games, as well as its subsequent transformation into a global entertainment leader, to Mr. Ohga's foresight and leadership. Another of Mr. Ohga's achievements was Sony's commercialization of the world's first CD player in 1982, after he led the development...

  • Page 7
    ... base to the following focus areas, to spur future growth. Sony's focus areas can be distilled into four key themes, "Networked Products and Services," "3D World," "Competitive advantages through differentiated technologies" and "Emerging markets," and they will drive our growth going forward. We...

  • Page 8
    ... the Sony Tablet in April 2011, and we plan to launch them in the global market starting in fall 2011. As for networked services, in fiscal year 2010 we launched two services under the Qriocityâ„¢*4 brand name. The two new services are "Video On Demand service powered by Qriocityâ„¢"* 5 and "Music...

  • Page 9
    07

  • Page 10
    ...attack launched against the PlayStation®Network, Qriocity and the network systems of Sony Online Entertainment LLC, which forced us to temporarily shut down all of these services. We regret any concern and inconvenience that the incidents may have caused our shareholders, customers and stakeholders...

  • Page 11
    ... and can be folded for easy portability. Its dual screen presentation and usability allows its displays to be combined and used as a large screen, or used separately for different functions, a feature not found in other tablets. Sony Tablet will become available in the global market starting in fall...

  • Page 12
    ... the world. Powerful and lively 3D images, produced by utilizing Sony's professional 3D broadcast equipment and 3D content production know-how, were broadcast live to homes around the world for the first time. 3D has proven to be a driver for the theatrical motion pictures business. Sony, uniquely...

  • Page 13
    ... February 13, 2011, plans to offer viewers the world's largest library of native 3D entertainment content by the end of 2011. â- Electronics Products that Expand the Field of 3D Content 3D content is becoming more personal and more realistic, thanks to Sony's 3D video cameras. The Handycam® HDR...

  • Page 14
    ... USB camera for PS3), the PlayStation®Move motion controller offers a brand-new way to enjoy PS3, and was launched in September 2010. Numerous highly anticipated stereoscopic 3D software titles scheduled for launch in fiscal year 2011 will further contribute to the growth of the 3D content market...

  • Page 15
    ... of our professional-use camera business by developing content creation products and security cameras that integrate our latest proprietary technologies into our image sensor and component businesses. In addition, Sony's digital cinema projectors, which I mentioned earlier, display 3D images in...

  • Page 16
    ... during peak electricity periods. Energy storage module using rechargeable lithium-ion batteries made with olivine-type lithium-ion iron phosphate. â- Sony Expands Its Digital Cinema Business from Selling Vertically Integrated Products to Providing Solutions Services Sony-which is in the unique...

  • Page 17
    ... a company with operations that also encompass the B2B and entertainment fields. In March 2011, I visited India's entertainment capital, Mumbai, to take part in a ceremony to inaugurate the Sony Media Technology Centre.*8 There I had the opportunity to speak with people involved in the production...

  • Page 18
    ...is in the leading position of each entertainment business-music, pictures, TV programs and game-and brings about a greater synergy with the electronics business by utilizing its strong brand. Sony is realizing profitable growth by expanding its network of directly managed Sony Stores, as well as its...

  • Page 19
    ... group, the Professional, Device & Solutions Group. Executive Deputy President Kazuo Hirai is responsible for the Consumer Products & Services Group. He successfully led the turnaround of the game business, expanded the PlayStation®Network and directed the launch of the Qriocity networked services...

  • Page 20
    Top: Howard Stringer Chairman, CEO and President Lower left: Kazuo Hirai Executive Deputy President Lower right: Hiroshi Yoshioka Executive Deputy President 18 14

  • Page 21
    ... world are experiencing Sony's innovative and differentiated technologies on their Sony BRAVIA LCD televisions, digital cameras, VAIO ® PCs, PS3, BD players, WALKMAN ® digital music players, Reader ™ digital books and Sony Ericsson smartphones, and using these and other Sony products to connect...

  • Page 22
    ... digital cameras and opening up a new realm of possibilities, the "Exmor R" received a rare honor for an image sensor-the Editors Award at the Camera Grand Prix 2010-in Japan. The development and mass production of the "Exmor R" gained further recognition when Sony Corporation and Sony Semiconductor...

  • Page 23
    ... Consequently, Sony is aggressively working to expand its overall CMOS image sensor business, including the "Exmor R," and has announced a 140 billion yen capital investment program for fiscal years 2010 and 2011 to meet market demand for its image sensor products*2. The Cyber-shot™ phone S006 is...

  • Page 24
    ... megapixels lens module for mobile phones Sony aims to be the world's leading company in both CCD and CMOS image sensor technology Image sensors are imaging elements that may be thought of as the "eyes" of digital video and digital cameras. In 1978, Sony announced that it had developed a 110,000...

  • Page 25
    ... in the world of imaging technology, we spent a considerable period struggling to overcome the noise issue. However, through ongoing trial and error, we came up with an idea that we thought might be the solution. Straight away, we asked the opinion of a Sony Handycam® video camera developer, who...

  • Page 26
    ...compact digital cameras and mobile phones, for interchangeable lens digital cameras a large-format image sensor (an APS-C-sized sensor or full-frame sensor) that provides high picture quality and advanced potential for creativity is absolutely essential. To meet such high demands, Sony developed the...

  • Page 27
    ... the image sensor business On September 1, 2010, Sony announced that it planned to invest approximately 40 billion yen in Sony Semiconductor Kyushu Corporation's Kumamoto Technology Center (Kumamoto TEC) to increase production capacity for "Exmor" and "Exmor R" CMOS image sensors. Execution of this...

  • Page 28
    ... feature looks at Sony in India from a variety of perspectives, including the strength of Sony's electronics business in the country, its local entertainment business LANKA initiatives and its growing role as a center for software SRI development. Kri shn a Bangalore Madras (Chennai) Coimbatore...

  • Page 29
    ...* LCD television market share estimated by GfK Marketing Services Japan Ltd. based on data for January 2010 through February 2011. Digital camera market share estimated by Sony based on data for April 2010 through February 2011. PC market share estimated by International Data Corporation Japan based...

  • Page 30
    ... on interstate sales, 28 we have established 30 warehouses nationwide, ensuring our ability to manage our supply chain effectively. Building on this robust operational structure, we are accelerating efforts to expand our marketing activities beyond our traditional customer base-India's 40 million...

  • Page 31
    ... 2011, Sony launched a major advertising campaign for BRAVIA LCD televisions featuring India's national team captain, Mahendra Singh Dhoni, as Sony Brand Ambassador. The highly effective multi-media campaign, which coincided with the Cricket World Cup, included approximately 3,000 television spots...

  • Page 32
    ... effective channel strategy that takes into account regional differences. In addition to national chain stores that cover many areas in India, we have regional chain stores in specific areas, and both types of stores continue to see sales growth. In India, there is not a single chain store network...

  • Page 33
    ... year 2010, ended March 31, 2011, with efforts to bolster day-to-day store sales and tighten inventory control, together with effective advertising and promotional activities, we succeeded in increasing our market share in several growing product categories and, as a result, in expanding the scale...

  • Page 34
    ... (2005) and SET PIX (2006). All of Sony Pictures' channels in India are owned, operated or distributed through a joint venture, Multi Screen Media Private Limited (MSM). As the official home in India for the Indian Premier League's (IPL) renowned Twenty20 cricket competition, MAX typically rates in...

  • Page 35
    ..., Centre Head, Sony India Software Centre (Lower left photo) In fiscal year 2010, ended March 31, 2011, our work contributed to efforts of the entire Sony Group to advance stateof-the-art 3D technologies, as well as to the development of new products, including Sony Internet TV, Sony Tablet and...

  • Page 36
    ... impact of foreign exchange rates. â- The increase in consolidated operating income was driven primarily by improved results in the Networked Products & Services segment, due principally to the contribution of the game business. â- A net loss attributable to Sony Corporation's stockholders was...

  • Page 37
    ... Televisions 35.9% Game 53.5% 2011 20.8% 46.6% Digital Imaging 19.2% Audio and Video 12.7% Semiconductors 10.7% Components 12.3% Professional Solutions 8.6% Other 0.6% PC and Other Networked Businesses 46.5% Consumer, Professional & Devices Networked Products & Services Pictures Music...

  • Page 38
    ... (Yen in billions) 3,518.1 3,572.7 Sales *1 Left: 2010 Right 2011 1,572.6 1,579.3 705.2 600.0 Consumer, Professional & Devices Networked Products & Services 522.6 470.7 851.4 806.5 460.8 447.8 Financial Services Sony Ericsson*2 All Other Pictures Music 162.5 118.8 Operating Income Left...

  • Page 39
    ... reductions of PlayStation®3 hardware and higher unit sales of PS3 software. Sales Operating income (loss) (Yen in billions) 1,572.6 1,579.3 35.6 (83.3) 2010 2011 The Pictures segment consists of motion pictures and television programming, and other businesses of Sony Pictures Entertainment...

  • Page 40
    ... in marketing, restructuring and overhead costs. 36.5 38.9 2010 2011 Financial Services* The Financial Services segment primarily includes Sony Financial Holdings Inc. (SFH) and SFH's consolidated subsidiaries such as Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance Inc. and Sony Bank...

  • Page 41
    ... cost structure. In addition, there was a benefit relating to the reversal of warranty reserves. 4.2 (34.5) 2010 2011 All Other consists of various operating activities, including disc manufacturing business activities and So-net Entertainment Corporation, an Internet-related service business...

  • Page 42
    ..., music, network services and financial services businesses, and the mobile phone business via a joint venture. Televisions BRAVIA™ LCD Televisions (HX920 Series) BRAVIA LCD televisions with Internet connectivity for fiscal year 2011 provide a brand new way to enjoy television. These models...

  • Page 43
    ... camera business, Sony reported sales of 5.2 million units worldwide, achieving a 43% global market share and maintaining its commanding number one market position. In fiscal year 2011, Sony will expand its lineup of Handycam® video cameras, introducing 3D models that will deliver higher picture...

  • Page 44
    ...the new VAIO ® C Series come in a range of vivid color variations that emphasize the personality of the user. The backlit keyboard makes it easy to see the keys, even in dark places, making typing more comfortable. In fiscal year 2010, Sony's market share increased across all regions, supported by...

  • Page 45
    ... of other customer groups, giving Sony the number one share*2 of Japan's market for portable digital music players. Looking ahead, Sony will work to further differentiate its products from those of its competitors by capitalizing on its acclaimed sound quality technologies and playback functions...

  • Page 46
    ... enjoyable entertainment experience. Two models have been developed: S1 (codename), which is optimized for rich media entertainment, and S2 (codename), which is ideal for mobile communications and entertainment. Sony Tablet will become available in global market starting in fall 2011.*3 *1 "Android...

  • Page 47
    ... 2011, Sony Ericsson is gradually expanding its lineup of Android-based smartphones, offering models in a wide range of prices. *1 "Xperia" is a trademark of Sony Ericsson Mobile Communications AB. *2 "Android" is a trademark of Google Inc. Game Sony's Next-Generation Handheld Entertainment System...

  • Page 48
    ... their first 3D trip to the big screen in Columbia Pictures' and Sony Pictures Animation's hybrid live-action and animated family comedy, The Smurfs. When the evil wizard Gargamel chases the Smurfs out of their village, through a magical portal and into our world, they land in the middle of New York...

  • Page 49
    ... century-style lawman, enforcing his brand of justice in a way that puts a target on his back with criminals and places him at odds with his bosses in the Marshal service. ©2011 Sony Pictures Television Inc. and Bluebush Productions, LLC, All Rights Reserved. Music Foo Fighters From Dave Grohl...

  • Page 50
    ... copies. In fiscal year 2011, ikimono-gakari has an ambitious calendar of activities that will drive the group forward to the next stage. These include the release of a new song that was written as the theme song for Mezamashi TV, a morning news program on Fuji Television, and the release of their...

  • Page 51
    ... insurance in Japan. Sony Bank provides highly convenient, high-quality Internet-based financial products and services, centered on asset management, to individual customers, and consistently scores high in customer satisfaction surveys. * "Lifeplanner" is a registered trademark of Sony Life. 49

  • Page 52
    ... Products & Services businesses, Common Software Platform, Global Sales and Marketing Platform and Creative Center Hiroshi Yoshioka Keiji Kimura Nicole Seligman Masaru Kato Executive Deputy President, Officer in charge of Professional, Device & Solutions businesses Executive Vice President, Officer...

  • Page 53
    ... Five-Year Summary of Selected Financial Data 52 Quarterly Financial and Stock Information 53 54 Segment Information 56 Consolidated Balance Sheets Consolidated Statements of Income 58 60 Consolidated Statements of Cash Flows 62 Consolidated Statements of Changes in Stockholders' Equity 51

  • Page 54
    ...) ...Research and development costs ...AT YEAR-END Net working capital (deficit) ...Long-term debt ...Sony Corporation's stockholders' equity...Common stock ...Total assets ...Number of shares issued at fiscal year-end (thousands of shares of common stock) ...Sony Corporation's stockholders' equity...

  • Page 55
    ... Stock Information Sony Corporation and Consolidated Subsidiaries-Years ended March 31 Yen in billions (Yen per share amounts) 1st quarter 2010 2011 2nd quarter 2010 2011 2010 3rd quarter 2011 2010 4th quarter 2011 Sales and operating revenue ...Equity in net income (loss) of affiliated companies...

  • Page 56
    ...) BY BUSINESS SEGMENT* Yen in millions Years ended March 31 2009 2010 2011 Consumer, Professional & Devices...Networked Products & Services ...Pictures ...Music ...Financial Services ...Equity in net income (loss) of Sony Ericsson ...All Other...Total ...Corporate and elimination ...Consolidated...

  • Page 57
    ... Televisions ...Digital Imaging ...Audio and Video ...Semiconductors ...Components ...Professional Solutions ...Other ...Total ...Networked Products & Services Game ...PC and Other Networked Businesses ...Total ...Pictures ...Music ...Financial Services ...All Other ...Corporate...Consolidated total...

  • Page 58
    Consolidated Balance Sheets Sony Corporation and Consolidated Subsidiaries-As of March 31 Yen in millions 2010 2011 ASSETS Current assets: Cash and cash equivalents...Marketable securities ...Notes and accounts receivable, trade...Allowance for doubtful accounts and sales returns ...Inventories ...

  • Page 59
    ... policy benefits and other ...Other ...Total liabilities ...Redeemable noncontrolling interest ...EQUITY Sony Corporation's stockholders' equity: Common stock, no par value- 2010-Shares authorized 3,600,000,000, shares issued: 1,004,571,464 ...2011-Shares authorized 3,600,000,000, shares issued...

  • Page 60
    Consolidated Statements of Income Sony Corporation and Consolidated Subsidiaries-Years ended March 31 Yen in millions 2009 2010 2011 Sales and operating revenue: Net sales ...Financial services revenue ...Other operating revenue ...Costs and expenses: Cost of sales ...Selling, general and ...

  • Page 61
    Yen 2009 2010 2011 Per share data: Common stock Net loss attributable to Sony Corporation's stockholders -Basic ...-Diluted ...Cash dividends ... (98.59) (98.59) 42.50 (40.66) (40.66) 25.00 (258.66) (258.66) 25.00 59

  • Page 62
    ... or impairment of securities investments held in the financial service business, net ...Deferred income taxes...Equity in net (income) losses of affiliated companies, net of dividends ...Changes in assets and liabilities: (Increase) decrease in notes and accounts receivable, trade ...(Increase...

  • Page 63
    ... 2009 2010 2011 Cash ï¬,ows from investing activities: Payments for purchases of fixed assets ...Proceeds from sales of fixed assets ...Payments for investments and advances by financial service business ...Payments for investments and advances (other than financial service business) ...Proceeds...

  • Page 64
    ... Sony Corporation and Consolidated Subsidiaries-Years ended March 31 Yen in millions Additional paid-in capital Accumulated other comprehensive income Treasury stock, at cost Sony Corporation's stockholders' Noncontrolling equity interests Common stock Retained earnings Total equity Balance...

  • Page 65
    ... other comprehensive income Treasury stock, at cost Sony Corporation's stockholders' Noncontrolling equity interests Common stock Retained earnings Total equity Balance at March 31, 2010 ...630,822 1,157,812 1,851,004 Exercise of stock acquisition rights ...99 99 Stock-based compensation...1,782...

  • Page 66
    ... Stock Price Range and Trading Volume on the Tokyo Stock Exchange Years ended March 31 Nikkei stock average Closing price of Sony Corporation stock Stock price and Nikkei stock average (Yen) 20,000 15,000 10,000 5,000 Trading volume (Million shares) 400 300 200 100 0 2007 2008 2009 2010 2011...

  • Page 67
    ...Securities and Exchange Commission, or our Annual Report to shareholders, please direct your request to: â- Japan DEPOSITARY, TRANSFER AGENT AND REGISTRAR FOR AMERICAN DEPOSITARY RECEIPTS JPMorgan Chase Bank N.A. 1 Chase Manhattan Plaza, Floor 58, New York, NY 10005 â- Contact SONY CORPORATION...

  • Page 68
    ... cost reductions for, its products and services, including LCD televisions and game platforms, which are offered in highly competitive markets characterized by continual new product and service introductions, rapid development in technology and subjective and changing consumer preferences; (iv) Sony...

  • Page 69
    At Sony we believe in the power of imagination. Catching dreams and pulling them down into reality. Filling our technology with emotion, vision and wonder. We believe curiosity is the key to creativity. Creating stories, creating experiences, creating progress. We believe our imagination can unlock ...

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