Sony's Future CEO, Kazuo Hirai, Faces Challenges in Turning around Company

By Ed Silverstein February 01, 2012

The newly named CEO of Sony, Kazuo Hirai, will have a lot of challenges when he takes over in April at the once-thriving company.

Hirai, who now runs Sony’s consumer products business, will replace the well-known Howard Stringer on April 1. Stringer will continue as chairman of the company’s board.

To get an idea of his priorities, Hirai has said that the company’s core electronics business needs to grow, such as in digital imaging, smart mobile and games. The company also needs “to turn around the television business” and “accelerate the innovation that enables us to create new business domains," Hirai said in a company statement.

But there are widespread reports increased television sales may be among the most important efforts the company could undertake under the new CEO. Sony’s troubled television unit may end up losing $2.3 billion during the current fiscal year alone, according to a report from Bloomberg News.

“The most pressing issue is to turn around the TV business,” Ryosuke Katsura, an analyst at Mizuho Securities Co., told Bloomberg about Sony. Already, Sony has come up with a plan to cut in half the number of TV sets it sells to 20 million in the next fiscal year. It will also make fewer LCD panels opting instead to outsource them.

Hirai said last year that televisions are a "fundamental platform" for Sony, with smartphones, tablets and laptops also being important, PC World reported.

It comes as little surprise the company chose Hirai as CEO – an insider who previously led Sony’s gaming division.

Stringer recommended Hirai as his replacement, and said the move needs to take place now. “Kaz is a globally focused executive for whom technology and the cloud are familiar territory, content is highly valued, and digital transformation is second nature,” Stringer said in the Sony statement. “I believe his tough-mindedness and leadership skills will be of great benefit to the company and its customers in the months and years ahead.”

On Thursday, Sony is expected to release its third-quarter earnings. Sony predicts the “fourth straight year of net losses for the fiscal year through March,” according to a report from The Associated Press. “The company has gone through massive cost cuts and restructuring and is hoping to recover in flat-panel TV, gaming and personal computer businesses.” Sony is valued at $18 billion, Bloomberg said.

The prominent brands that once marked Sony’s success – such as the Walkman – have lost market share to Apple’s iPod and iPhone. Its television sales faces pressure from Samsung Electronics and LG Electronics. But Sony is far from the only Japanese TV maker facing problems in the current climate.

“Japanese TV makers are facing too many troubles; the stronger yen, falling prices, sluggish demand and sliding market share due to competition,” Yoshihiro Okumura, who works with Chiba-Gin Asset Management Co., told Bloomberg. “If they can introduce a hit product or a next generation product, then the situation may change.”

Also hurting Sony has been the deadly tsunami and earthquake that damaged plants in Japan and more recent flooding in Thailand.

The company has tried to put on a positive face recently at the Consumer Electronics Show held in Las Vegas, TechZone360 reported. Stringer gave the opening keynote address at the trade show.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO East 2012, happening NOW in Miami, FL. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. For more information on registering for ITEXPO registration click here.

Stay in touch with everything happening at ITEXPO. Follow us on Twitter.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

Related Articles

Amazon Pulls Apple TV, Google Chromecast from its Store

By: Kyle Piscioniere    10/2/2015

The move is a blow to all three companies; Apple and Google lose the retail giant's highly visible sales platform, while Amazon loses the valuable ins…

Read More

Google and Microsoft Settle Patent Disputes

By: Doug Mohney    10/1/2015

Google and Microsoft have agreed to end a group of 20 smartphone and video game lawsuits in the U.S. and Germany. The battles started in 2010 over roy…

Read More

After Embroiled CEO Search, Twitter Expected to Reappoint Dorsey

By: Kyle Piscioniere    10/1/2015

Jack Dorsey, current founder and CEO of the payment company Square and founder of Twitter, is expected to retake the helm as Twitter's CEO without res…

Read More

Google Dives into RCS, Buys Jibe Mobile

By: Doug Mohney    10/1/2015

Rich Communications Services (RCS) is a controversial topic in net purists' circles and the discussion just got hotter: Google has purchased Jibe Mobi…

Read More

Carriers Play Critical Mobile Finance Role

By: Tara Seals    10/1/2015

More than 68 percent of consumers have yet to use mobile financial services, but that number is changing as mobile broadband continues to roll out glo…

Read More