Sony realigns core businesses, hints at next CEO

Sony Corp. has disclosed plans to reorganize its core electronics and networked service businesses starting April 1.

In line with such plans, the Japanese electronics giant also gave hints as to who could succeed 69-year-old Howard Stringer, the company's representative corporate executive officer, chairman, CEO and president. The current Sony chief has expressed his continued commitment to steer the company ''through the next stage in its transformation.''

But the possible heir apparent to Stringer is now Kazuo Hirai, the head of its PlayStation game business, according to The Wall Street Journal. According to Bloomberg, Hirai has been given the nod over three other Sony executives.

Under Stringer, Sony will realign its core electronics and networked service operations into two business groups. After the realignment, all of Sony's CE and networked service functions will reside in one group, named the Consumer Products & Services Group.

The B2B, component and semiconductor businesses will form the second group, the Professional & Device Solutions Group.

Hirai, currently corporate executive officer and executive vice president, will be named representative corporate executive officer and executive deputy president of Sony, and will be responsible for the Consumer Products & Services Group. This will include all of Sony's CE businesses—including TV, home video, home audio, digital imaging, PC, game and mobile products—as well as the networked service businesses.

In his current role, Hirai led the turnaround of the games business, expanded the PlayStation Network—which now boasts more than 74 million registered accounts worldwide as of March 9, 2011, according to Sony.

The Professional & Device Solutions Group, which includes broadcast and professional products, semiconductors, batteries and other key components, will be led by Hiroshi Yoshioka, corporate executive officer and executive deputy president of Sony.

The new structure and executive appointments were formally approved by Sony's board. "Sony is now entering the second phase of its transformation toward new development and growth, under the leadership of Mr. Stringer. Sony's board of directors is pleased that Mr. Stringer has accepted our request to continue his leadership of the company as chairman, CEO and president, and we will fully support him and his newly configured senior management team" said Yotaro Kobayashi, chairman of Sony, in a statement.

Sony this month announced its consolidated results for the third quarter ended December 31, 2010. Sales were $27.238 billion (2.2 trillion yen), a decrease of 1.4 percent compared to the same quarter of the previous fiscal year, primarily due to unfavorable foreign exchange rates.

Net income attributable to Sony's stockholders, which excludes net income attributable to non-controlling interests, decreased year-on-year to $893 million (72.3 billion yen). ''Operating income in the Networked Products & Services segment increased significantly due to the contribution of the game business, while operating income decreased in most other segments, particularly the Consumer, Professional & Devices segment which was negatively affected mainly due to LCD televisions,'' according to Sony.

As part of the strategy for transforming its system LSI business and ''securing an asset light business model,'' Toshiba Corp. recently signed a memorandum of understanding with Sony, expressing the intent to dissolve Nagasaki Semiconductor Manufacturing Corp. (NSM) and to transfer 300mm wafer fabrication lines there from Toshiba to Sony.

Sony plans to re-acquire a semiconductor fab in Nagasaki, Japan, that it sold to Toshiba in 2008. Sony will buy the fab for about $597.2 million in order to double its capacity to produce CMOS sensors. The acquisition will double Sony's image sensor output to about 40,000 wafers per month, according to the report.

Sony transferred its Fab 2 in Nagasaki to Toshiba in March 2008 as part of a complex $835 million deal between the two companies that included the establishment of a joint venture.

NSM, which was established in March 2008 and is located in the Nagasaki Technology Center of Sony Semiconductor Kyushu Corp. (SCK), has been manufacturing the "Cell Broadband Engine" processor, the graphics engine "RSX", and other high-performance semiconductors and leading-edge SoCs.

As part of the deal, Toshiba will no longer make the Cell processor, according to Toshiba.

- Mark LaPedus
??EE Times