Sony's survival could involve Sony pulling out of more business areas, in order to concentrate on its imaging and entertainment divisions. Seemingly confirming earlier reports, CEO Kazou Hirai's new strategy will now depend on its camera sensor sales and the success of the PlayStation gaming arm to increase its operating profit 25-fold within the next three years, at a cost of minimizing its other businesses.
According to Reuters, Hirai revealed that the company would not be pursuing growth in low-performing areas including its smartphone division, in order to focus on its more profitable areas. In Sony's last quarterly results of 2014, it reported a loss of $1.2 billion, with the majority of the blame being put upon its smartphone arm.
As for what fate the company's phone unit will face, it is unclear. So far, it has sold off its PC business and is in the process of spinning off its TV branch, so a similar spin-off for the Xperia brand could possibly happen. Alternately, Sony could instead completely shutter the loss-making arm, rolling in its engineering staff into the PlayStation division to make the next generations of gaming hardware. Hirai admitted he would not "rule out considering an exit strategy" for its TV and mobile units, indicating again that they may be separated from the company in the years to come.
While Hirai's turnaround plan is taking time to come to fruition, it does appear to be paying off finally. By the end of the financial year, it expects to make an operating profit of 20 billion yen ($167 million) rather than an operating loss, though it will still have a full-year net loss. As for March 2018, Hirai is targeting a return on equity of more than ten percent, and an operating profit of at least 500 billion yen ($4.2 billion).
