Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Sony upbeat on games and robots but cuts outlook for image sensors

Published 06/29/2016, 01:24 AM
Updated 06/29/2016, 01:24 AM
© Reuters. Sony Corp's President and CEO Hirai, CFO Yoshida and Executive Deputy President Suzuki bow during its corporate strategy meeting at the company's headquarters in Tokyo

© Reuters. Sony Corp's President and CEO Hirai, CFO Yoshida and Executive Deputy President Suzuki bow during its corporate strategy meeting at the company's headquarters in Tokyo

By Makiko Yamazaki

TOKYO (Reuters) - Japan's Sony Corp (T:6758) on Wednesday lifted the sales target for its games division next year on hopes for its new virtual reality headset, and said it would re-enter robots a decade after it last abandoned the business.

But the electronics giant cut its outlook for image sensor sales amid slowing demand for smartphones, and maintained its operating profit target of 500 billion yen ($4.9 billion) for the year beginning April.

The announcement comes as company watchers bank on sensors to continue driving Sony's revival after years of struggle.

While the sensor slowdown is likely to disappoint, investors can take comfort in the unchanged profit target, which highlights Chief Executive Kazuo Hirai is keeping to a recovery track and has not given up on new technologies such as artificial intelligence and virtual reality.

Hirai at a news conference said the games business was set to be Sony's biggest growth driver, helped by strong console sales, a rise in subscribers to its PlayStation network and the launch of its virtual reality headset.

The headset will be sold from October for $399, versus the $599 of a rival product from Facebook Inc's (O:FB) Oculus Rift.

"It's an area where Sony can leverage its expertise in cameras, filming, content production as well as entertainment assets," Hirai said, lifting the division's sales target range to 1.8 trillion to 1.9 trillion yen ($17.6 billion to $18.6 billion) from 1.4 trillion to 1.6 trillion yen.

He also confirmed Sony aimed to introduce a robot "capable of forming an emotional bond".

Sony was a pioneer in robotics, launching dog AIBO in 1999 and humanoid QRIO in 2003. But efforts stalled during a decade-long struggle to cut costs in its consumer electronics business amid price competition from Asian rivals. It produced its last AIBO and QRIO in 2006.

SENSOR SLOWDOWN "INEVITABLE"

Sony cut its sales outlook for its devices division, which includes image sensors used in smartphones, to a range of 1 trillion to 1.05 trillion yen from 1.3 trillion to 1.5 trillion yen.

Strong demand from smartphone makers such as Apple Inc (O:AAPL) had helped Sony recover from a slump in sales of consumer electronics such as television sets.

But Apple and other smartphone makers have seen slowing sales of high-end handsets since late last year, prompting Sony to recently cancel the development of advanced camera modules designed for high-end smartphones.

"The ongoing slowdown in profit growth appears inevitable through fiscal 2017," Hirai said.

Asked about the impact of Britain's vote to leave the European Union, Hirai said Sony aims to achieve its targets regardless of consequent currency swings.

© Reuters. Sony Corp's President and CEO Hirai, CFO Yoshida and Executive Deputy President Suzuki bow during its corporate strategy meeting at the company's headquarters in Tokyo

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.