Game & Network Services Segment 3
Mobile Communications Segment 22
Imaging Products & Solutions Segment 36
Digital Imaging Products
Professional Solutions
Home Entertainment & Sound Segment 63
Televisions
Audio and Video
Devices Segment 81 Sony IR Day 2014 Game & Network Services Segment
November 25, 2014
Andrew House President and Group CEO Sony Computer Entertainment Inc. Group Executive in Charge of Network Entertainment Business Sony Corporation
Agenda Game & Network Services Segment
Game & Network Services Segment
1. Business Overview
2. Mid-term Business Direction
3. Financial Targets
4. Summary
Sony IR Day 2014 4 1-1. Business Overview Game & Network Services Segment
Sony Computer Entertainment
Research, development and sales of hardware and software for PlayStation®4 (PS4™), PlayStation®3 (PS3™), PlayStation®Vita (PS Vita), and PSP® (PlayStation®Portable) Sony Network Entertainment Provide content and services for games, music and movies through Sony Entertainment Network for
PlayStation®, Android, iOS based devices
Sony IR Day 2014 5
1-1. Business Overview Game & Network Services Segment
The History of Introduction of Platforms and Services 1993: Sony Computer Entertainment Inc. founded
1994: Introduction of original PlayStation® Introduction of CD-ROM as a major format
2000: Introduction of PlayStation®2 DVD-ROM adaption
2004: Introduction of PSP® (PlayStation®Portable) First portable entertainment system developed by SCE
2006: Introduction of PlayStation®3 BD-ROM adaption SM Launch of PlayStation®Network (PSN ) Global launch of network service PlayStation®Store (PS Store) Open Enabling digital content distribution
2008: Video delivery service launch on PS Store First service for purchase and rental of video content for PlayStation® platform 2009: Offer 3rd party video services Netflix support on PS3™ 2010: Sony Network Entertainment International LLC founded
Introduction of Video Unlimited/Music Unlimited Expansion of service offerings to non PlayStation® platforms
2011: Introduction of PlayStation®Vita Realized ultimate portable entertainment system
2013: Introduction of PlayStation®4 Fastest 10 million units sales in PlayStation® history
Sony IR Day 2014 6 1-2. Regional Headquarters & SCE Worldwide Studios Game & Network Services Segment
■ Regional Headquarters ■ SCE Worldwide Studios
Sony Computer Entertainment America, LLC. Sony Computer Entertainment Europe Ltd. Sony Computer Entertainment Inc. Sony Network Entertainment International LLC. London, UK Sony Computer Entertainment Japan Asia San Mateo, USA Tokyo, Japan
■
■ ■
Evolution Studios Japan Studio Bend Studio Guerrilla Games Polyphony Digital Inc. Naughty Dog Inc. Guerrilla Cambridge San Diego Studio Media Molecule San Mateo Studio London Studio Santa Monica Studio Sucker Punch Productions
Sony IR Day 2014 7
1-3. Sales by Product/Region Game & Network Services Segment
FY2013 Product Sales Ratio FY2013 Area Sales Ratio
Japan Asia 16% Contents & Americas Services Net Sales Net Sales 42% 44% 1,043.9 Hardware 1,043.9 bln yen 56% bln yen Europe Middle East Others 42%
Sony IR Day 2014 8 1-4. Financial Performance:FY2014 Op. Income increase/decrease factors Game & Network Services Segment
(bln yen) Sales
1 Profit improvement in HW 749.9 1,043.9 1,290 • PS4™: Profit improvement due to higher sales • PS3™: Profit reduction due to lower sales despite cost reduction • PS Vita: Profit increase due to new model launch 2 3 2 Contents & Services 4 • Game SW: Profit reduction due to reduced number of major titles
• Network: Profit increase due to growth of PlayStation®Plus (PS Plus), game content revenue, video and music services 35
3 Profit reduction due to increased operating expenses • Decrease in marketing cost related to HW • Increase in network infrastructure related costs -3.7 -18.8
4 Negative impact of the appreciation of the USD Op. Income
1 FY12 FY13 FY14 (Forecast as of October 2014)
Sony IR Day 2014 9
2. Mid-term Business Direction Game & Network Services Segment
Expand the PlayStation® Ecosystem by delivering evolved and integrated game & network services
Strategy I : Retain and expand engaged PlayStation® users
Strategy II : Increase ARPPU and drive ancillary revenue
ARPPU = Average Revenue Per Paying User
Sony IR Day 2014 10 2. Mid-term Business Direction Game & Network Services Segment
PlayStation® Ecosystem
PlayStation ® Contents Users PlayStation 4 PlayStation Vita & Services 50M+ MAU PS4™/PSPlayStation Vita/PSN NetworkSM
MAU = Monthly Active Users
Sony IR Day 2014 11
2. Mid-term Business Direction Game & Network Services Segment
Retain and expand engaged PlayStation® users Continuous enhancement of PS4™ game features to maintain and strengthen competitive advantage
Deliver new experiences, Relentless efforts on enhance functions and usability hardware cost reduction
Sony IR Day 2014 12 2. Mid-term Business Direction Game & Network Services Segment
Retain and increase engaged PlayStation® users Acquire casual users while further strengthening the engagement of core gamers through relevant title offerings
Additional game title introduction Enrich games, video and music services for core user segment for casual user segment
Sony IR Day 2014 13
2. Mid-term Business Direction Game & Network Services Segment
Retain and increase engaged PlayStation® users Expand customer base through innovative network services like cloud TV and streaming games Remove constraints of console and waiting time with PS Now
Sony IR Day 2014 14 2. Mid-term Business Direction Game & Network Services Segment
Retain and increase engaged PlayStation® users Expand customer base through innovative network services like cloud TV and streaming games Provide innovative live + DVR experience through the cloud TV service
PlayStation™Vue transforms the TV experience by putting the customer in control and enabling them to experience TV in a more personalized and interactive way
Sony IR Day 2014 15
2. Mid-term Business Direction Game & Network Services Segment
Retain and increase engaged PlayStation® users Addressing growth opportunities in markets with economic development and cultural transitions
Markets with future growth potential including China and Latin America
Gaming culture transition, e.g. in Germany and the Middle East
Sony IR Day 2014 16 2. Mid-term Business Direction Game & Network Services Segment
Increase ARPPU and drive ancillary revenue Realize higher conversion rate and improve retention rate of PS Plus by enhancing its user value
PS Plus Number of Subscribers End of Sep 2014
Strong online multiplayer titles
PS4™ launched
2010 2013 2017 Selection of relevant complementary titles Prioritized invitation for a/b testing
Sony IR Day 2014 17
2. Mid-term Business Direction Game & Network Services Segment
Increase ARPPU and drive ancillary revenue Create more demand via personalized TV, Video and Music distribution services Increase revenue through partnerships with best-in-class services, leveraging an attractive user base
“Just for you” curation for Original content Offer 3rd party video services
PlayStation® gamers programing to increase frequency of console usage
Sony IR Day 2014 18 2. Mid-term Business Direction Game & Network Services Segment
Expand the PlayStation® Ecosystem by delivering evolved and integrated game & network services
Strategy I : Retain and expand engaged PlayStation® users • Continuous enhancement of PS4™ game features to maintain and strengthen competitive advantage • Acquire casual users while further strengthening the engagement of core gamers through relevant title offerings • Expand customer base by innovative network services like Cloud TV service and Streaming game service • Addressing growth opportunities in markets with economic development and cultural transitions Strategy II : Increase ARPPU and drive ancillary revenue • Realize higher conversion rate and improve retention rate of PS Plus by enhancing its user value • Create more demand via personalized TV, Video and Music distribution services • Increase revenue through partnerships with best-in-class services by leveraging attractive user base
ARPPU = Average Revenue Per Paying User
Sony IR Day 2014 19
3. Initiatives to Improve Profitability (FY2014 to FY2017) Game & Network Services Segment
(bln yen)
Sales 1,400～ 749.9 1,043.9 1,290 1,600
1. Maintain and expand devoted PlayStation® users
2. Increase ARPPU and ancillary revenue
3. Operating expense management 5%～6% Operating Income 2.7% Margin
FY12 FY13 FY14 FY17 (Forecast (Target) as of October 2014)
Sony IR Day 2014 20 4. Summary Game & Network Services Segment
FY2017 Financial Targets
Sales 1,400～1,600 billion yen
Operating Income Margin 5%～6%
Increase sales and profit through expansion of PlayStation® users, providing compelling and cutting edge game/network experiences
Sony IR Day 2014 21
Sony IR Day 2014 Mobile Communications Segment
November 25, 2014
Hiroki Totoki President & CEO Sony Mobile Communications Inc. Agenda Mobile Communications Segment
Mobile Communications Segment
1. Business Overview
2. FY2014 Operating Performance
3. Market Trends
4. Mid-term Business Direction
Sony IR Day 2014 23
1-1. FY2013 Business Overview Mobile Communications Segment
FY2013 Sales by Key Product Groups FY2013 Sales by Region
Accessories and Others Other Japan Areas
Tablet
Sales Sales Asia-Pacific 1,191.8 1,191.8 United States bil yen bil yen
Smartphone China Europe
Sony IR Day 2014 24 1-2. Market Share in Key Markets Mobile Communications Segment
Inside figure: FY13 market size Outside figure: Sony share Japan Europe North America 0.7% 17.5% 8.8%
1.4 trillion yen 4.4 trillion yen 5.3 trillion yen
China Asia-Pacific Middle East and Africa Latin America 0.9% 5.9% 5.4% 6.5%
7.5 trillion yen 3.3 trillion yen 1.8 trillion yen 1.7 trillion yen
Source: Sony Mobile Sony IR Day 2014 25
2-1. Changes in FY2014 Operating Income (vs. FY2013) Mobile Communications Segment (bln yen) FY12 FY13 FY14 1 Unfavorable impact of the appreciation of 766.1 1,191.8 the US dollar Sales 1,350
2 Sales increase, mainly in high-end products 12.6
3 Increase in marketing, R&D and IP expenses Operating -41.1 Income 4 Increase in restructuring charges -204
1 2 3 4 5 Impairment charge of goodwill 176 bil yen
5
Despite recording a sales increase, mainly in high-end products, a larger operating loss is expected, primarily due to the impairment charge of goodwill, the increase of marketing expenses, the unfavorable impact of foreign exchange rates, and the expected increase of restructuring charges.
Sony IR Day 2014 26 2-2. Changes in FY2014 Operating Income (vs. May FCT, excl. impairment charge) Mobile Communications Segment (bln yen)
1 Unfavorable impact of the appreciation of 1,530 1,350 the US dollar Sales
2 Decrease in sales in mid/low-end smartphone Operating 26 segment Income Oct FCT 3 Reduction of marketing expenses and research May FCT and development expenses -28
4 Increase in restructuring charges
1 2 3 4
Operating income is expected to decline sharply versus May forecast, primarily due to the decrease in sales in mid/low-end smarphones mainly in South East Asia, China and Europe, partially offset by a reduction in marketing and R&D expenses.
Sony IR Day 2014 27
3-1. Smartphone Market Trends (by price segment) Mobile Communications Segment
Units (billion units) Value (trillion yen) CAGR CAGR (FY14-17) (FY14-17) 10.1% Majority of market value 4.4% High-end Moderate growth: CAGR around 3% 55% (> 30,000 1.818 1.64 35 (FY14-17) 30.2 31.2 yen) 16 1.52 28.9 Major markets: US, Europe, China 1.6 30 27.5 1.38 22% 2.9% 1.414 1.23 25 55% 1.212 2.7% Moderate growth: CAGR 3+% 22% 3.0% Mid-range (FY14-17) 20 1.010 (14,000 - Decline of ASP due to growth of low- end segment 0.88 15 30,000 yen) Major markets: China, Europe, Asia 0.66 3.3% 56% 17.5% 10 24% 0.44 High growth: CAGR 10+% 5 Low-end 0.22 21% 11.1% (FY14-17) (< 14,000 Driving overall ASP declines 0.00 0 yen) FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Major markets: China and Asia FCT FCT FCT FCT FCT FCT FCT FCT CAGR: Compound Annual Growth Rate ASP 22,000 yen 19,000 yen Source: Sony Mobile * wholesale price ASP decline in overall market due to growth slowdown in the high-end segment and rapid growth in the low-end segment
Sony IR Day 2014 28 3-2. Smartphone Market Trends (by region) Mobile Communications Segment * Trillion yen, FY14-17 CAGR % 8.5 5.1 7.9 High-end 4.6 5.8 6.3 Mid-range CAGR 3.8% CAGR CAGR Low-end 2.2% 3.0% FY14 FY17 Europe: FY14 FY17 FY14 FY17 1.3 1.4 Growth in high-end China: CAGR Market growth 2.4% North America: slowing down FY14 FY17 Stable growth, mainly in 4.8 Japan: high-end 3.6 Limited growth 2.6 CAGR 2.2 2.5 2.1 CAGR 10.5% CAGR 5.0% 7.2% FY14 FY17 FY14 FY17 FY14 FY17 Asia-Pacific: Latin America: Fastest growing Middle East and Africa: Mid/low-end comprises market, primarily in Growth mainly in low-end 2/3 of market low-end Source: Sony Mobile Growth in China is slowing down, and the market growth will be largely driven by low-end smartphone market.
Sony IR Day 2014 29
3-3. Channel Development Mobile Communications Segment
(trillion yen)
Operator Channels Open Channels Smartphone Market Worldwide 27.5 Trillion Yen (FY14) 1.7 3.0 Low-end低価格帯 Low-end低価格帯 2.0 4.5
31.2 Trillion Yen (FY17) 3.0 3.7 Mid-range中価格帯 FY14 Mid-range中価格帯 FY14 3.5 3.9 FY17 FY17
9.7 6.4 高価格帯 高価格帯 High-end 10.9 High-end 6.4
0.0 2.0 4.0 6.0 8.0 10.0 12.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Source: Sony Mobile
Limited growth in high-end and mid-range in operator channels, but rapid growth in low-end in open channels
Sony IR Day 2014 30 4-1. Mid-term Business Direction Mobile Communications Segment
Selection and Focus: Transforming to better compete in the quickly moving mobile industry
Selection and Focus 1 Revise sales and marketing strategy by region, and consider transformation in order to improve the efficiency of our investments and enhance profit management
Selection and Focus 2 Streamline product portfolio, and improve efficiency of both hardware and software development in order to enhance cost competitiveness Selection and Focus 3 Shift marketing focus from acquisition to retention, utilizing data analytics to improve cost efficiency and marketing effectiveness
Selection and Focus 4 Reshape corporate structure and drive transformation, particularly in HQ and support functions
Sony IR Day 2014 31
4-2. Sales & Marketing Set-up (current) Mobile Communications Segment
Sony IR Day 2014 32 4-3. Streamline Product Portfolio Mobile Communications Segment Company A Company B Company C Company D Approx. 50% reduction Approx. 50% reduction Approx. 40% reduction Approx. 70% reduction
Average of the above Sony Mobile four companies
Approx. 50% reduction Approx. 30% reduction
Source: Sony Mobile Improve profitability by reducing number of products, and improving resource allocation per product
Sony IR Day 2014 33
4-4. Marketing Efficiency Improvement Mobile Communications Segment
Net Promoter Score of Xperia Customers Retention Rate of Xperia Customers - Retained customers show high score - Continuously improving 50 35% 40 43 40
30 26 30% 20 22 20 16 16 8 25% 10 4
0 2012 2013 2014 20% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 既存顧客Retained 新規顧客Acquired 顧客全体Total '13 '13 '13 '13 '13 '14 '14 '14 '14 '14 '14 '14 '14 '14
* Net Promoter Score is a KPI measuring customer loyalty.
Steadily improve retention rate of Xperia customers 60% 50%
40% 35%
20%
Source: Sony Mobile 0% * Worldwide 2014 2017 Sony IR Day 2014 34 4-5. Lower Breakeven Point Mobile Communications Segment
OPEX Operating Gross Margin
Approx. 30% 2-3 points2-3% reduction improvementimprovement
FY12 FY13 FY14 FY16 FY12 FY13 FY14 FY16
Drive transformation to generate stable profit
Sony IR Day 2014 35
Sony IR Day 2014 Imaging Products & Solutions Segment
November 25, 2014
Shoji Nemoto EVP, Corporate Executive Officer President of Imaging Products and Solutions Sector, President of Professional Solutions Group
Shigeki Ishizuka SVP, Corporate Executive President of Digital Imaging Business Group Sony Corporation Agenda Imaging Products & Solutions Segment
Overview of Imaging Products & Solutions Segment Digital Imaging Products 1. Business Overview 2. Forecasted Market Trends 3. Mid-term Business Direction Professional Solutions
4. Business Overview
5. Mid-term Business Direction Imaging Products & Solutions Segment
6. Business Performance
7. Summary Sony IR Day 2014 37
Overview of Imaging Products & Solutions Segment Imaging Products & Solutions Segment
Mission : With continuous innovation in the Digital Imaging category, we aim to firmly maintain Sony’s leading position in the industry and contribute to the Sony Group by generating stable profit
Consumers B2B Customer Customer Segments HandyCam Compact Digital Still Camera Camcorder Content Creation Visual Medical for Pro- Presentation ActionCam Digital Interchangeable Lens Camera sumers Sensing New Camera (Mirrorless/DSLR) Modules Lens portfolio Security, Felica, etc. Felica, Security,
System Solution Imaging Platform
Digital Imaging Products Business Professional Solutions Business
Sony IR Day 2014 38 Imaging Products & Solutions Segment 1-1. Business Overview Digital Imaging Products
FY2013 Sales by Products FY2013 Sales by Region
Others Others 動画Video Japan Camera
Asia, US Sales Middle Sales 442.7 East & 442.7 bln yen Africa bln yen
Europe
Still China Camera静⽌画
Category breakdown*1 *1. abbreviated name in parentheses () will be used in this presentation
Video Camera: Consumer Video Camera (“Consumer CAM” *2) *3, Professional Video Camera (“Professional CAM”) Still Camera: Compact Digital Still Camera (“DSC”), Interchangeable Lens Camera (“ILC”), Interchangeable Lens *2. CAM=Video Camera *3. Including Action Camera
Sony IR Day 2014 39
Imaging Products & Solutions Segment 1-2. Key Products’ Market Share (Value basis) Digital Imaging Products FY2013 Still Camera Market FY2013 Video Camera Market Market Size: 2,300bln yen Market Size: 320bln yen
No.3 No.1 Share Share
Market Share by Product Category Market Share by Product Category DSC: 19％(No.3) Consumer CAM: 37% (No.1) (Premium DSC*1 share: over 30%(No.1)) (Conventional video camera share: 50% (No.1)) ILC (Inc. Lens): 9％(No.3) Professional CAM: 48% (No.1) (Mirror-less camera share: 40% (No.1))
*1. Premium DSC= DSC with large (1/1.7inch over) imager or high zoom (x20 over) Source: Sony Sony IR Day 2014 40 Imaging Products & Solutions Segment 2. Forecasted Market Trends by Product Digital Imaging Products
The video camera market is expected to shrink slightly, while the still camera market is expected to shrink significantly. In still cameras, the percentage of mirror-less ILCs will increase
Expect increase in ratio of ILC, especially mirror-less (Thousand units） (Unit Basis) Still Camera 70,000 Market Composition静⽌画 60,000 FY14 FY17 Forecast市場 50,000
40,000 ILC: Mirror-less ILC: Single reflex DSC 30,000 No significant change in market composition Professional cameras accounts for 30% on value basis 20,000 Video Camera 10,000 Market動画 Composition市場 FY14 FY17 0 Forecast FY14 FY15 FY16 FY17 Video Camera Market Still Camera Market Consumer CAM Professional CAM Source: Sony Sony IR Day 2014 41
Imaging Products & Solutions Segment 3-1. FY2014 Business Outlook and Mid-term Business Direction Digital Imaging Products
Reasons for Improvement from FY2013→FY2014 Change in FY2014 Operating Income
Negative Positive ① Improvement in product mix due to the 500 Factor Factor Operational Others shift to premium products (ILC, DSC） 450 Improvement 400 ② Growth of “α” interchangeable lens business 350 300 Growth of ③ Improvement in operational efficiency 250 Lens Biz. 200 Premium - Reduction in sales company SGA Decline in Shift 150 - Reduction in fixed costs associated with manufacturing Shipments 100 due to - Improvement in development efficiencies by propelling Market 50 Design Platform Shrinkage 0 FY13FY13 FY14⾒込FY14 (Forecast as of October 2014)
Mid-term Business Direction Aim to sustain highly profitable business by continuously focusing on premium and growing markets while pursuing operational efficiencies
Sony IR Day 2014 42 Imaging Products & Solutions Segment 3-2. Mid-term Business Direction Digital Imaging Products
Aim to sustain highly profitable business by continuously focusing on premium and growing markets while pursuing operational efficiencies
Strategy I Consumer Camera Market *1 Enforcement of “α” Interchangeable Lens (Value basis) Camera (ILC) Business 100% 90% Growing Segment Strategy II 80% Expansion of “α” Interchangeable 70% ILC: Single reflex *2 60% Lens Business ILC: Mirror-less *2 50% DSC (Premium *3) Strategy III 40% DSC/CAM Further Premium Shift 30% Mature Segment Strategy IV 20% DSC (Entry) 10% Application of Camera Technology to Consumer Video Camera *4 0% B2B Market FY08FY2008 FY2009 FY2010 FY2011 FY2012 FY2013FY14 FY2014 FY2015 FY2016FY17 FY2017 FCT FCT Strategy V *1 Source: Sony *2 Including Interchangeable Lens Continuous Improvement in *3 Premium DSC= DSC with large (1/1.7inch over) imager or high zoom (x20 over) Operational Efficiency *4 Including Action Camera Sony IR Day 2014 43
Imaging Products & Solutions Segment 3-3. Strategy I. Enforcement of “α” ILC Business: Activity of FY2013 / 2014 Digital Imaging Products
FY2013 FY2014 Create New Full Frame Mirror-less Camera Market The World’s Best Technology in a Compact Body
World’s First, Optical Low-pass Filter-less World’s Highest Sensitivity World’s First Full Frame ILC 35mm Full Frame Ultra High Resolution (35M pixels) ISO409600 with 5-axis image stabilization
High-end User New
Released Nov. 2013 Released Nov. 2013 Released Jun. 2014 To be released Dec. 2014
World’s Fastest Autofocus*1 Entry and Middle class *1 α6000 as of Feb. 2014 Middle Mirror-less camera line-up Wide-area 179-point ＆ with top market share focal plane phase-detection AF sensor Entry Released May 2014 ＋ Depth User Worldʼs fastest* AF speed of 0.06 sec * α6000 as of Feb. 2014. Based on Sony research ＋ Time AF algorithm for steadfast and Released Sep. 2014 accurate predictionSony IR of Day next 2014 move Imaging Products & Solutions Segment 3-4. Strategy I. Enforcement of “α” ILC Business: Our Next Vision Digital Imaging Products FY2013 FY2014 FY2015 Create New The World’s Best Establish clear differentiation from others Full Frame Mirror- Technology in a by utilizing 3 key in-house core technologies less Camera Market Compact Body
Ultimate Ultimate 高付加 Sensitivity Resolution High-end価値 User New Ultimate ４Ｋ Speed Image ＡＦ Cube Middle 普及＆ Entry User Image Stabilization Sony IR Day 2014 45
Imaging Products & Solutions Segment 3-5. Strategy II. Expansion of “α” Interchangeable Lens Business Digital Imaging Products Accelerate lens business by expanding rich lens line-up, especially on full frame E-mount (FE) lens, and marketing them with “G” brand and “Zeiss” brand backed by cutting edge in-house lens technology
Aspherical Lens ED (Extra-low Dispersion) Nano AR Coating Circular Aperture Linear Motor Super Sonic-wave Motor (SSM) In-house lens Elements Technology Glass technologies Expansion of FE line-up Rich lens line-up offering versatile shooting options
Total Lens Line-up*3 FY2013 : 56 Lenses Product FY2014*1 : 64 Lenses ↓ FY2015~(Short term goal) FY2015~ Cumulative production*2 : Over 70 Lenses FY2013 FY2014*1 Over 20 5 FE lenses 13 FE lenses over 30 mil. units FE lenses
Brand lenses with Sony’s cutting edge digital technology Established brand of optics from analog era Branding Strategy Branding mainly for Branding mainly for Customer -Standard to Telephoto - Wide ~ Standard -Zoom type Lenses - Prime type Lenses
*1. Including lenses under development and to be released within fiscal year 2014 (~March, 2015). *3. Total number of Interchangeable lensesSony in IRSony Day ILC 2014 line-up. *2. Total number of Interchangeable lens produced for Sony ILC, including lens produced by Konika Minolta in the past. Imaging Products & Solutions Segment 3-6. Strategy III. DSC/CAM Further Premium Shift Digital Imaging Products Keep competitiveness of premium products by evolving and combining in-house core technologies which realize new photography experiences and customer value
RX100 (FY2012) ＡX100 “Pocket-sized, pro performance” “Your Story. In 4K detail” Premium DSC with 1.0-type Sensor World’s first 4K Consumer CAM with 1.0-type Sensor
RX100M2 (FY2013) “Ultra-sensitive artistry” New 1.0-type back-illuminated Sensor Image Cube “Expansion α mount family RX100M3 (FY2014) PXW-FS7 to professional CAM” “ ” Wide angle / High resolution Professional CAM with E-mount New large aperture lens Interchangeable lens system New EVF New image processing engine
Sony IR Day 2014 47
Imaging Products & Solutions Segment 3-7. Strategy IV. Application of Camera Technology to B2B Market Digital Imaging Products Planning to expand B2B camera business by applying our strong core camera technologies cultivated in the competitive consumer camera market
Automotive Machine Vision Camera Block for Camera Camera Surveillance Camera
Sony IR Day 2014 48 Imaging Products & Solutions Segment 3-8. Strategy V. Continuous Improvement in Operational Efficiency Digital Imaging Products
Propel camera design platform to realize engineering efficiencies R&D and reinforce our core technologies “Be Particular” and “Decide Practically”
Production Lean management of fixed cost to meet tough business conditions
Sales Streamline sales function in accordance with corporate strategy
Sony IR Day 2014 49
Imaging Products & Solutions Segment 3-9. Summary Digital Imaging Products
Aim to sustain highly profitable business by continuously focusing on premium and growing markets while pursuing operational efficiencies
Key Strategies 5000 Sales ◆ Operating Income Margin 150% I. Enforcement of “α” Interchangeable 4500 130% Decline in Expansion Lens Camera (ILC) Business 4000 Enforcement Premium shift 110% Shipments of “α” Others of “α” DSC/CAM 3500 due to Lens Biz. 90% Camera Biz. II. Expansion of “α” Interchangeable Market Lens Business 3000 Shrinkage 70% 2500 50%
III. DSC/CAM Further Premium Shift 2000 30% Sustainable high IV. Application of Camera Technologies 1500 10% profit business to B2B Market 1000 -10%
500 -30% V. Continuous Improvement in 0 -50%
Operational Efficiency FY14FY14 FY17中期FY17 (Forecast as of (Target) October 2014)
Sony IR Day 2014 50 Imaging Products & Solutions Segment 4-1. Business Overview Professional Solutions
Three Core Business Areas Solutions business aimed toward broadcasters’ and other content creators’ mission-critical tasks (Content Creation) Projection systems for sophisticated and diversified content (Projector) Medical products and systems using Sony’s imaging and device technologies for capturing, printing, sharing and presenting images (Medical)
FY2013 Sales by Key Business Areas
Other Endoscopes Ultrasound Radiation Operating Examination Rooms Rooms Medical Broadcasters Content Creation Projector
Classrooms/ Digital Meeting Cinemas Rooms Film Studios Sports Stadiums Auditoriums Home Theaters Sony IR Day 2014 52 Imaging Products & Solutions Segment 4-2. Business Overview - Content Creation Professional Solutions
Content Creation – business strengths: Overwhelming trust from customers derived from Sony’s long-term contribution to their mission-critical tasks Global No. 1 market share in camera system
FY2013 Sales by Key Products / Systems FY2013 Sales by Region
Global No.1 in Broadcast Cameras and Camcorders Japan Camera Other Areas System Archive System Other Products/ United Systems States China Europe
Switchers 4K/HD Live Server
Sony IR Day 2014 53
Imaging Products & Solutions Segment 4-3. Business Overview - Projector Professional Solutions
Projector – business strengths: In-house production of key devices provides us with technological differentiation and high quality Successful laser light source model that is more advanced than our competitors has allowed us to increase our share in the middle-brightness market Expansion of market share in high-end home projector with 4K SXRD panel
FY2013 Sales by Key Products / Systems Strength of vertical integration Phosphor laser light source and 3LCD panel can realize vivid color images
Digital Cinema Business Projector 3LCD Laser Light Source Projector
Home Projector “BrightEra” is the name of our own LCD micro-display device which realizes high picture quality Sony IR Day 2014 54 Imaging Products & Solutions Segment 4-4. Business Overview - Medical Professional Solutions
Medical – business strengths: Global No. 1 market share in medical printers for endoscope and ultrasound systems Expansion of medical products other than printers Example: head-mount image processing unit for endoscopic image display
FY2013 Sales by Key Products / Systems Head-mount image processing unit enables more flexible work styles
Global No. 1 in Medical Conventional Laparoscopic procedure using Printers for endoscope and laparoscopic procedure Sony’s head-mounted display ultrasound systems Monitor, Camera, Recorder
Printer & Media
Surgeons’ posture and Enables surgeons to movement are restricted position themselves flexibly
*Please note that although this product has been approved in Japan and EU, Sony IR Day 2014 55 its launch in other countries has not yet been confirmed.
Imaging Products & Solutions Segment 5-1. Mid-term Business Direction Professional Solutions
Utilizing the strengths of the three core businesses, we will reinforce the competitiveness and profitability of each business, and contribute to stable and sustainable profit for Sony’s electronics business
Forecasted Market Trends by Business Area (CAGR*1 for FY2014-2017)
Content Creation Addressable Market CAGR 2-3%
Projector Installation Projectors CAGR 11-13%
Medical Addressable Market CAGR 5-7% Source: Sony *1. CAGR: Compound Annual Growth Rate Sony IR Day 2014 56 Imaging Products & Solutions Segment 5-2. Mid-term Business Direction - Content Creation Professional Solutions
Maintain competitiveness by offering innovative value in total workflow from acquisition to distribution utilizing the strengths of our camera systems, and respond to customer’s demand for higher resolution and further efficiency
The remote production environment 4K for HD solution can be easily simplified compared to IP Live Production a conventional system using multiple coaxial cables
HD Super Zoom
Archive System Media Lifecycle Service
Create new efficiencies and new business based on customer’s media assets and archives
Sony IR Day 2014 57
Imaging Products & Solutions Segment 5-3. Mid-term Business Direction - Projector Professional Solutions
Continue to invest in “one and only” differentiated technologies Propose Sony’s unique visual entertainment experience to the customers
Elemental technologies necessary to realize immersive “Kando” experience
SXRD 3LCD
Laser Light Source
Sony IR Day 2014 58 Imaging Products & Solutions Segment 5-4. Mid-term Business Plan - Medical Professional Solutions
Offer innovative products and systems for images in medical workflow by optimizing Sony’s imaging and device technologies and resources
Expansion of products for key accounts Distribution of surgery video in hospitals
*product photos are current model. Sony IR Day 2014 59
6-1. IP&S Segment: Change in FY2014 Operating Income Imaging Products & Solutions Segment
(bln yen) 1 Decrease in sales as a result of the Sales 756.2 741.2 710.0 shrinking consumer digital imaging market
2 Improvement in product mix due to a shift to higher-margin products 3 Reduction of sales, engineering, and 52.0 production costs Operating Income 26.3 4 Positive impact of foreign exchange rates 1.4 Var. Var. 4 3 FY12 FY13 Var. FY14 Var. 2 (Forecast as of 1 October 2014)
Operating income is forecasted to increase as a result of 1. an improvement in the product mix which covered the decline in sales due to the shrinking consumer digital imaging market, and 2. fixed cost reductions
Sony IR Day 2014 60 6-2. IP&S Segment: Initiatives to Improve Profitability (FY2014 to FY2017) Imaging Products & Solutions Segment
(bln yen) ～ 1 (-) Market contraction in commoditized existing Sales 756.2 741.2 710.0 650 700 businesses Operating (+) Expanding new consumer businesses 52.0 2 Income 1 2 ３ ４ 7%～9% i.e. Interchangeable lens cameras 7 3 (+) Growing Medical & Projector businesses 7.3% 26.3 Expand customer value in the Contents Operating Creation business through 4K and IP Income Margin (%) 4 (+) Reduction in fixed costs through operational 3.5% efficiency 1.4 0.2% FY12X.X FY13 FY14 FY17 (Forecast as of (Target) October 2014)
Although the market size of our existing commoditized businesses is shrinking, we plan to increase operating income through the expansion of new consumer and professional businesses, in addition to controlled fixed costs
Sony IR Day 2014 61
7. Summary Imaging Products & Solutions Segment
FY2017 Financial Targets
Sales 650～700 billion yen
Operating Income Margin 7 % ～ 9 %
IP&S will aim to generate stable profit by promoting technology-driven product development and establishing new customer segments
Sony IR Day 2014 62 Sony IR Day 2014 Home Entertainment & Sound Segment
November 25, 2014
Masashi Imamura Representative Director and President, Sony Visual Products Inc.
Ichiro Takagi SVP, Corporate Executive / President of Video and Sound Business Group Representative Director and Vice President, Sony Visual Products Inc.
Agenda Home Entertainment & Sound Segment
Televisions
1. Business Overview
2. Forecasted Market Trends
3. Mid-term Business Direction Audio and Video
4. Business Overview
5. Forecasted Market Trends
6. Mid-term Business Direction Home Entertainment & Sound Segment
7. Business Performance
8. Summary
Sony IR Day 2014 64 Home Entertainment & Sound Segment 1-1. FY2013 LCD TV Sales Unit / Value Share Televisions FY2013 Sales by Key Product FY2013 Sales by Region
Japan 4K TV Other Areas United States Sales Sales 754.3 754.3 bln yen bln yen Europe Asia-Pacific 2K TV China
FY2013 LCDTV Unit Share by Manufacturer FY2013 LCDTV Value Share by Manufacturer Source: Sony Source: Sony
#3 #3
Sony IR Day 2014 65
Home Entertainment & Sound Segment 1-2. TV Business Operation Sites Televisions
EMS Sony Visual Products Inc.
Shanghai Factory Aichi Inazawa Factory
EMS
Malaysia Factory
Brazil Factory
＝Transferred site
＝Production, assembly factory
＝D&D, R&D site
Sony IR Day 2014 66 Home Entertainment & Sound Segment 2-1. Forecasted LCD TV Market Trends Televisions
（Thousand Units） 4K LCD 2K LCD CAGR＊ （100 mil yen） 4K LCD 2K LCD 3.3% 120,000 CAGR 249,886 -2.5% 233,102 240,608 101,743 250,000 226,596 100,066 97,205 100,000 94,238 16,996 8％ 33,621 14％ 51,906 67,989 19,395 200,000 22％ 27％ 19％ 29,826 80,000 37,823 30％ 42,826 150,000 39％ 60,000 45％
100,000 209,600 199,481 188,701 181,897 40,000 82,348 70,240 59,382 51,412 50,000 20,000
0 0 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 ＊ CAGR: Compound Annual Growth Rate ＊ Source: DisplaySearch Although the market is expected to grow slightly on a unit basis, it is expected to decline on a value basis due to a decline in ASPs. Even in this environment, the 4K market will grow steadily.
Sony IR Day 2014 67
Home Entertainment & Sound Segment 2-2. Forecasted LCD TV Market Trends by Area Televisions (Million Units) China Overview by Area (Business Opportunity) Europe North America 58.0 62.6 48.2 47.9 NA and EU units will remain flat as 40.0 40.6 these markets are mature. Value will +8% decline slightly due to a decrease in -0.5% +1.4% Developed prices. Market Japan is recovering from the impact of FY14 FY17 FY14 FY17 FY14 FY17 Countries the switch from analog to digital broadcasting. Market is growing on both a unit and value basis, thanks in 63.0 +43% part to the upcoming Tokyo Olympics. 48.7 8.6 25.7 27.3 6.0 Units will increase slightly but value +29% +6% will decline due to a slow down in the FY14 FY17 China FY14 FY17 market expansion caused by first time Japan Latin America buyers. FY14 FY17 Pan-Asia market will grow slightly, Pan-Asia Emerging especially in India and Vietnam. ME&A Market LA market is maturing. Units will Countries increase slightly and value will decrease due to a decrease in prices. ＊ Source: DisplaySearch Developed markets are expected to level out, however emerging markets, especially Pan-Asia, are expected to grow steadily.
Sony IR Day 2014 68 Home Entertainment & Sound Segment 3-1. Mid-term Business Direction Televisions Establish a stable, profitable business by differentiating our products and selecting and concentrating where we use our resources
～FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Home Entertainment & Sound Segment 3-2. Mid-term Business Direction Televisions Establish a stable, profitable business by differentiating our products, and selecting and concentrating where we use our resources
■ Enhance basic functions: Fascinating products that meet our customers’ needs
1) Enhance essential values: picture quality, cosmetic design, ease of use
2) Combine our differentiated technologies and industry standard technologies - Differentiated technologies: back lights + signal processing - Commoditized panels - Utilization of the Android Platform
Sony IR Day 2014 70 Home Entertainment & Sound Segment 3-3. Mid-term Business Direction Televisions Establish a stable, profitable business by differentiating our products, and selecting and concentrating where we use our resources
■ Selection and concentration Profitable business structure even if sales fall by 20~30%
1) Accelerated decision-making after splitting out the TV Business
2) Reduction of product line-up - 30% reduction from FY2014 to FY2017
3) Clear focus on sales strategy by area - US: Shop in shop - EU: Build up shop front (as an interface to our customers)
4) Further improvement in design efficiency and low cost operations by global mother factory in Malaysia
5) Reduction of headquarter costs and fixed sales cost
Sony IR Day 2014 71
Home Entertainment & Sound Segment 4-1. FY2013 Business Overview Audio & Video
FY2013 Sales by Key Product FY2013 Sales by Region
Headphones
Others Audio Sound Bars Growing Other Japan Category Areas Sales *1 Sales Wireless Speakers Home Video Video 431.5 431.5 bln yen Asia-Pacific bln yen United States China Audio Others Europe
WALKMAN
System Stereos Amplifiers *1：”Audio Growing Category” includes Sound Bar, Wireless Speaker and Headphone as its main products.
*2: Sales are based on the organizational structure as of October 2014, which includes a transferred business. Sony IR Day 2014 72 Home Entertainment & Sound Segment 4-2. Key Products’ Market Share Audio & Video （Value basis）
Headphones Wireless Speakers Sound Bars
#2 #1 #3 ※ ※ Japan / US / ※ Japan Japan / US / EU5 EU3 *1 *2
#1 in Japan
Digital Music Players Home Video (Blu-ray Recorders) (WALKMAN)
1#2位 #3 ※ Japan ※ Japan
＊Source: Sony #1 (latest) as of November 2014 #2 since October 2014 *1: EU5: UK, France, Germany, Italy, Spain *2: EU3: UK, France, Germany Sony IR Day 2014 73
Home Entertainment & Sound Segment 4-3. Audio & Video Business Operation Sites Audio & Video
Thailand Factory Sony City Osaki
Malaysia Factory
＝Manufacturing factory Brazil Factory
＝R&D / Design site
R&D / Design base sites are located in Tokyo (Osaki). Malaysia and Thailand manufacturing sites also have some design functions. Brazil factory performs local manufacturing.
Sony IR Day 2014 74 Home Entertainment & Sound Segment 5. Forecasted Market Trends by Product Audio & Video （Value basis） Product （bln yen） Business Opportunity CAGR -5% Outlook 2,500 Deliver brand-new audio & visual experiences through improved basic functions and linkage 2,000 -19% with mobile devices. -15% -15% Home Video Go after remaining players’ profit through 1,500 efficiency in design & operations. -17% -12% -10% Utilize current technology and know-how to Audio, respond to changes in the market or 1,000 Others customers and expand peripherals.
Audio 500 11% 6% 4% Growing Deliver high-res products with Sony’s original Category sound technology to meet the growing 0 （Headphones, demand for high quality sound and offer new Sound Bars, FY14 FY15 FY16 FY17 Wireless exciting sound experiences more easily. Speakers） ＊ Source：Sony
By FY2017, the audio growing category (Headphones, Sound Bars, and Wireless Speakers) will expand to almost 50% of the market, while the Home Video portion of the market will shrink. Sony IR Day 2014 75
Home Entertainment & Sound Segment 6-1. Mid-term Business Direction Audio & Video
Establish firmly profitable structure without relying on sales growth
Strategy Ⅰ: Deliver the best sound and picture to customers through high value-added products with high-res technology. Increase sales and profit through high value-added products in the audio growing category (Headphones, Sound Bars, and Wireless Speakers) positioning high-res as our core technology. Improve profitability by reviewing regional strategy to meet market and competition changes. Strategy Ⅱ: Strengthen design and operational efficiencies. Save fixed costs and loss costs through strong operational ties between design and manufacturing which is led by key factories. Strategy Ⅲ: Enhance brand with the best sound & the best picture. With high-resolution products, raise Sony brand awareness as high-quality sound and picture brand.
Sony IR Day 2014 76 Home Entertainment & Sound Segment 6-2. Mid-term Business Direction Audio & Video Aim to improve profitability through an expansion of our high-res product portfolio
Expand SONY’s audio products in living room by its original high-res experience
Sony IR Day 2014 77
7-1. HE&S Segment: Change in FY2014 Operating Income Home Entertainment & Sound Segment (bln yen)
1 Improvement in model mix, cost reduction Sales 1,016.8 1,199.3 1,230.0 Significant improvement through an increase in high value-added models, and a reduction in 13.4 material costs -21.0 2 Reductions in sales company costs
-82.2 3 Negative impact of foreign exchange rates Operating Income 1 2 3 4 4 Increase in design & manufacturing costs FY12 FY13 FY14 （Forecast as of October 2014）
Significant improvement due to an increase in high value-added models, and a reduction in cost
*The figures for sales and operating income are based on the organizational structure as of October 2014, which includes a transferred business. Sony IR Day 2014 78 7-2. HE&S Segment: Initiatives to Improve Profitability (FY2014 to FY2017) Home Entertainment & Sound Segment
(bln yen) Televisionsング 1,000 Sales 1,016.8 1,199.3 1,230.0 ~ 1,100 1 Improvement in profitability through product ～ differentiation by enhancing basic functions 13.4 2 4% 1.1% 2 Fixed cost reductions realized by selecting and concentrating where to utilize our resources Operating Income FY12 FY13 FY14 FY17 Margin -2% （Forecast as of （Target） Audio & Videoプロフェッショナル・ソ October 2014） リューション] 1 Increase in sales and operating income due to the -8% introduction of premium products such as high-res -21.0 -82.2 2 Fixed cost reductions through efficiencies in design and manufacturing.
Target a 2~4% operating margin by improving product margins through stronger products and fixed costs reductions.
*The figures for sales and operating income are based on the organizational structure as of October 2014, which includes a transferred business. Sony IR Day 2014 79
8. Summary Home Entertainment & Sound Segment
FY2017 Financial Targets
Sales 1,000～1,100 billion yen
Operating Income Margin 2～4 %
Target a 2~4% operating margin by improving product margins through stronger products and fixed costs reductions.
*The figures for sales and operating income are based on the organizational structure as of October 2014, which includes a transferred business. Sony IR Day 2014 80 Sony IR Day 2014 Devices Segment
November 25, 2014
Tomoyuki Suzuki EVP, Corporate Executive Officer President of Device Solutions Business Group Sony Corporation
Agenda Devices Segment
Devices Segment
1. Business Overview
2. Mid-term Business Direction 1 Business policy 2 Image Sensor 3 Energy 3. Summary
Sony IR Day 2014 82 FY2013 Business Overview Devices Segment
FY2013 Sales by Key Products
Others [Category] [Sales (bln yen)] [Product/Application]
Storage Media ★ Mobile, Security cameras, Image Sensor 320.0 DSLR/DSC Image ★ Sales Sensor Camera Module 50.0 Mobile 742.3 Energy LSI 120.0 LSI for Game, Laser, RF SW bln yen 18% 43% Polymer, Cylindrical, Energy 140.0 ESS (Energy Storage) LSI Camera Module Storage Media 90.0 Tape, Memory, Disk
* The figures for sales and operating income are based on the organizational structure as of October 2014, which excludes a transferred business.Sony CorporationSony Investor IR Day Relations 2014 8383
FY2014 Business Overview Devices Segment
Sales & Operating income (bln yen)
+40.0 +117.7 860.0 820.0 ◆Changes from previous year 742.3 Sales increased by 16％, OP increased by 79.9 bln yen Robust smartphone market conditions (Image Sensor/Energy) Strong demand for power tools （Energy) Profit improvement in image sensors Others Sales decrease in System LSIs due to the shift from PS3 to PS4 Recording impairment loss for Energy’s long-lived assets in FY13
Energy
Camera Module +36.0 63.0 ◆Changes from May forecast Sales increase by 5％, OP increase by 36.0 bln yen Image Sensor +79.9 27.0 Favorable exchange rates Robust smartphone market conditions (Image Sensor/Energy) -16.9 Strong demand for power tools （Energy) Profit improvement in image sensors Sales Operating Sales Operating Sales Operating income income income FY13 FY14 FY14 Actual October Forecast May Forecast *Operating loss in FY13 includes a 32.1 billion yen impairment charge related to long-lived assets in the energy business. Sony CorporationSony Investor IR Day Relations 2014 8484 * The figures for sales and operating income are based on the organizational structure as of October 2014, which excludes a transferred business. Mid-term Business Direction Devices Segment Direction Strategy ■“Selection and concentration” of business -Concentrate resources to main business areas Strengthen profitability -Strengthen profitability in mature business areas ■Healthy asset management/Advance investment for future business
■“Technological differentiation” and advantage Always be the first -Exceed competitors by strengthening our device competitiveness in the market -Always be the first to introduce products by advancing technologies and developing cutting-edge technologies
Be the source of Sony’s end ■“Device innovation” -Increase customer value with system solutions products’ competitiveness -Strengthen ties with customers and strategic partnership
Sony IR Day 2014 85
Product Lifecycle Devices Segment
Market Introduction Development Maturing Declining
DSBG Development Strengthen Reconstruct Terminate Strategy Advanced Investment Concentration Profitability Life Space UX Image Sensor Tuner Game/TV LSI Wearable Camera Module MMIC Conventional- Business Automotive System Energy SXRD/HTPS Laser Area Medical Storage Media Optical Pickup ARAM system
Sony IR Day 2014 86 FY2017 Business Portfolio Devices Segment
Expand sales by differentiating technologies in Image Sensors (incl. Camera Module) and Energy
FY2013 Sales by Key Products FY2017 Sales by Key Products
Others New Biz
Others Storage Media Image Storage Media Image Sensor Sales Sensor Sales Energy 1,300 Energy 742.3 15% ～1,500 18% bln yen bln yen LSI Camera LSI Module 47% of Camera Module sales 63% of sales
* The figures for sales and operating income are based on the organizational Sony IR Day 2014 87 structure as of October 2014, which excludes a transferred business.
Image Sensor Market Overview Devices Segment
Concentrate on expanding market for mobile, IP Security cameras and automotive
Sony Share (units) FY13→FY17 100% Smartphone Compact DSC 80% (Main) Market FY13 FY17 FY13 FY17 51 →13mil.pcs volume 1,061→1,607mil.pcs size
60% Category IP Security Market volume as of FY17 FY13 FY17 CAGR FY13-FY17 ILC 13 →97mil.pcs Sony Share as of FY17 FY13 FY17 40% Tablet 18 →10mil.pcs FY13 FY17 409→567mil.pcs
CCTV Security 20% Automotive FY13 FY17 FY13 FY17 CAGR55% 97 → 79mil.pcs 36 →87mil.pcs
0% CAGR -40% -30% -20% -10% 0% 10% 20% 30% 40% (Units: FY13→FY17)
*Compact DSC: Compact Digital Still-20% Camera, ILC: Interchangeable Lens Camera, CAGR: Compound Average Growth Rate Sony IR Day 2014 88 Image Sensor Market Overview Devices Segment
Concentrate on expanding market for mobile, IP Security cameras and automotive
Sony Share (units) FY13→FY17 100% <
・60%Strengthen Imaging Category IP Security Market volume as of FY17 FY13 FY17 CAGR FY13-FY17 ILC 13 →97mil.pcs Sony Share as of FY17 FY13 FY17 ・40%Evolve to SensingTablet 18 →10mil.pcs FY13 FY17 409→567mil.pcs
CCTV Security 20% Automotive FY13 FY17 FY13 FY17 CAGR55% 97 → 79mil.pcs 36 →87mil.pcs
0% CAGR -40% -30% -20% -10% 0% 10% 20% 30% 40% (Units: FY13→FY17)
*Compact DSC: Compact Digital Still-20% Camera, ILC: Interchangeable Lens Camera, CAGR: Compound Average Growth Rate Sony IR Day 2014 89
Image Sensor Market Overview Devices Segment
Concentrate on expanding market for mobile, IP Security cameras and automotive
Sony Share (units) FY13→FY17 100% <
・60%Strengthen Imaging Category IP Security Market volume as of FY17 FY13 FY17 CAGR FY13-FY17 ILC 13 →97mil.pcs Sony Share as of FY17 FY13 FY17 ・40%Evolve to SensingTablet 18 →10mil.pcs FY13 FY17 409→567mil.pcs
CCTV Security 20% Automotive FY13 FY17 FY13 FY17 CAGR55% 97 → 79mil.pcs 36 →87mil.pcs
0% CAGR -40% -30% -20% -10% 0% 10% 20% 30% 40% (Units: FY13→FY17)
*Compact DSC: Compact Digital Still-20% Camera, ILC: Interchangeable Lens Camera, CAGR: Compound Average Growth Rate Sony IR Day 2014 90 Strengthen Imaging : “New imaging world” realized by Sony’s cameras Devices Segment
In spite of Compact DSC size 20.2MP 8.9MP Super 35mm CMOS Image Sensor 1” CMOS Image Sensor Installation of a global shutter allowing clear images without motion skew and other rolling shutter distortions
α6000
12.2MP 35mm Full Size CMOS Image Sensor Apply phase- and contrast-detection autofocus Wide pixel pitch delivers about 3 times sensitivity, about 2.3 times 179 phase detection points phase-detection AF sensor can signal saturation and phenomenal sensitivity up to ISO 409600 shoot in 0.06 seconds: the world’s fastest autofocus Sony CorporationSony Investor IR Day Relations 2014 9191
Strengthen Imaging : Exceed the limits of the human eye Devices Segment
Limits of speed
Limits of sensitivity
Limits of dynamic range
Limits of viewing field
Limits of distance
Sony IR Day 2014 92 Strengthen Imaging : “1msec world” Devices Segment
Able to switch to 1000fps whenever recording moving images
Sony IR Day 2014 93
Image Sensor Market Overview Devices Segment
Concentrate on expanding market for mobile, IP Security cameras and automotive
Sony Share (units) FY13→FY17 100% <
・60%Strengthen Imaging Category IP Security Market volume as of FY17 FY13 FY17 CAGR FY13-FY17 ILC 13 →97mil.pcs Sony Share as of FY17 FY13 FY17 ・40%Evolve to SensingTablet 18 →10mil.pcs FY13 FY17 409→567mil.pcs
CCTV Security 20% Automotive FY13 FY17 FY13 FY17 CAGR55% 97 → 79mil.pcs 36 →87mil.pcs
0% CAGR -40% -30% -20% -10% 0% 10% 20% 30% 40% (Units: FY13→FY17)
*Compact DSC: Compact Digital Still-20% Camera, ILC: Interchangeable Lens Camera, CAGR: Compound Average Growth Rate Sony IR Day 2014 94 Evolve to Sensing : Entry into automotive & wearable world based on strengthening imaging technologies Devices Segment No.1 share in smartphone market Further improve the value of smartphone Image Sensor technologies ■Realize imaging quality/function/usability with technologies in high-end DSC ■Improve video functions ■Thinner
Improve automotive safety Drive development in wearable products
Driver monitor Sight Tracking Front Camera Crash prevention Rear/Surround View Parking Assist Surround View Parking AssistParking 1
Back mirror Camera Glare-proof
High beam Control Side View Ensure viewing field Switch to side mirror Sony CorporationSony Investor IR Day Relations 2014 9595
Evolve to Sensing : Meet customer needs by Module & System Solution Devices Segment
System Solution Camera Module Image Sensor ＋ System
Super high resolution Embedded 6 axis correction Degree of eye opening & Closing High speed Recognition Shape of outer eye area (Low power consumption) Smile Shutter Compact/Thinness Shape of PS4 Face log-in wrinkle Degree of mouth Target opening High sensitivity Z1 6.321 mm Shape of corners Z3 5.632 mm Extraction of the mouth 11％ thinner High resolution Depth Sensing Dual Cameras
Column-parallel ADC Assembly technologies Information system technologies Technologies Back-illuminated structure Camera signal-processing Stacked structure technologies Sony CorporationSony Investor IR Day Relations 2014 9696 Evolve to Sensing : Meet customer needs by Module & System Solution Devices Segment
System Solution Camera Module Image Sensor ＋ System
Embedded High speed Recognition (Low power consumption) Smile Shutter Compact/Thinness PS4 Face log-in Target High sensitivity Extraction
High resolution Depth Sensing Dual cameras
Column-Parallel ADC Assembly technologies Information system technologies Technologies Back-illuminated structure Camera signal-processing Stacked structure technologies Sony CorporationSony Investor IR Day Relations 2014 9797
Evolve to Sensing : New functions delivered by system solutions Devices Segment
Recognition/Distance Extraction High-speed processing
Able to accurately calculate distances Able to capture clear images Able to capture fast-moving subjects quickly even in bad weather Recognition/Distance realized by the Images that surpass the limits of the High-speed readout and processing combination of dual cameras and signal human eye are delivered by system LSIs realized by high-performance image processors cultivated in TV image processing sensors and back-illuminated structure
Defog
Under study for LIDAR using SWIR Backlight correction SWIR Pulse Diffusion Laser Filter IM Source: Ishikawa Watanabe Laboratory, The University of Tokyo
Sony CorporationSony Investor IR Day Relations 2014 9898 Business Scenario by Category Devices Segment
Mobile Sales target by category Main business for further added value Application: Smartphone Tablet New Business Non-Mobile Scenario: Entry into Chinese smartphone makers +52% Non-Mobile -9% Base business for utilizing technological advantage Application: DSC/CAM/DSLR Professional Camera Security Camera Mobile
New Business +118% Business for meeting customer needs by System Solution Application: Medical FY13 FY14 FY17 Automotive Includes camera module Sony IR Day 2014 99
Image Sensor Wafer Production Capacity Devices Segment Proactively execute domestic investment
(300mm wafer basis; unit: 1,000 wafers/month) ＜Recent investment＞ (bln yen) 75 ・Press Release in Sep 2010, Kumamoto TEC approx. 40 ・Press Release in Dec 2010, Nagasaki TEC approx. 100 ・Press Release in Jun 2012, Nagasaki TEC approx. 80 60 ・Press Release in Jan 2014, Yamagata TEC approx. 35 50 ・Press Release in July 2014, Nagasaki/Kumamoto TEC approx. 35
25
Dec. Mar. Nov. 2010 2015～2016 Yamagata TEC Nagasaki TEC Kumamoto TEC 2012 2014 Studying further capacity increase Sony IR Day 2014 100 Business scenario utilizing technology differentiation Devices Segment
For AV/IT Sales target by category Linked with Sony’s core business by utilizing gel polymer batteries Application: Smartphone Wearable Branded Scenario: Entry into major smartphone makers business Entry into Chinese smartphone makers +10% For Non-AV/ITQWEE566 Non-AV/IT
New market creation by Olivine-type batteries Application: Power tool +60% ESS (Energy Storage system) Automotive AV/IT Scenario: Entry into Megawatt level large-sized ESS Establishment of JV with Hydro-Québec +25% Branded batteries Stable business with Sony brand & battery technology FY13 FY14 FY17
No.1 in quality in the industry Sony IR Day 2014 101
For AV/IT Winning Strategy by Sony Gel Polymer Batteries Devices Segment
Higher energy density Long life High safety
Realize higher energy density by More stable structure of gel polymer Gel electrolyte is Sony’s unique gel polymer compared with competitors’ electrolyte flame-retardant (gel electrolyte) structure Gel electrolyte keep steam pressure low even if the temperature rise Low swelling ratio
Atsugi TEC Koriyama plant
electrolyte Material development Product design ＋Basic research Gel electrolyte Energy Density Energy
Period reported at the Energy business meeting held on Apr. 2014
FY2005 FY2010 FY2012 FY2014 FY2017 Company 1 Company 2 Sony
10 Sony Corporation Investor Relations 102 Sony IR Day 2014 2 For Non-AV/IT Winning Strategy by Olivine-type batteries Devices Segment
Stable structure Stable discharge Quick charge ＝Safety＋Long life characteristics ＝large-scale system
Very safe due to no oxygen Capture stable electricity even Realize high speed charging dissociative adsorption when charging by high-power charging Long life due to stable structure =high affinity to wind power and solar power highly bound Non-oxide type electrode materials (lithium iron phosphate) power voltage discharge characteristic charge characteristics current Power Structure of cathode lithium iron phosphate Li Fe current Power Other electrode materials O
Empty charging status Full P Charging time
10 Sony Corporation Investor Relations 103 Sony IR Day 2014 3
Summary Devices Segment FY2017 Financial Targets Sales 1,300～1,500 billion yen
Operating Income Margin 10 % ~12 %
◆Image Sensors: Focus on wearables and automotive in addition to smartphones ◆Energy: Focus on smartphones/wearables, power tools and ESS
Trend from FY2012
Sales 752.7742.3 860.0 1,300～1,50016.0 bln yen 1600.0 9%10%～11%～ 12% 7% 11.0 Operating Income margin 5% 6.0 600.0 Operating -2% 63.0 Income 37.2 -16.9 1.0 △ 400.0 FY12 FY13* FY14 FY17 △ 4.0 (Forecast as of October 2014) (Target） *Operating loss in FY13 includes a 32.1 billion yen impairment charge related to long-lived assets in the energy business. *The figures for sales and operating income are based on the organizational structure as of October 2014, which excludes a transferred business. Sony IR Day 2014 104 Cautionary Statement
Statements made in this presentation with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to: ( i ) the global economic environment in which Sony operates and the economic conditions in Sony’s markets, particularly levels of consumer spending; ( i i ) foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets and liabilities are denominated; (iii) Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including televisions, game platforms and smartphones, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing consumer preferences; (iv) Sony’s ability and timing to recoup large-scale investments required for technology development and production capacity; ( v ) Sony’s ability to implement successful business restructuring and transformation efforts under changing market conditions; (vi ) Sony’s ability to implement successful hardware, software, and content integration strategies for all segments excluding the Financial Services segment, and to develop and implement successful sales and distribution strategies in light of the Internet and other technological developments; (vii) Sony’s continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to prioritize investments correctly (particularly in the electronics businesses); (viii) Sony’s ability to maintain product quality; (ix) the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures and other strategic investments; ( x ) significant volatility and disruption in the global financial markets or a ratings downgrade; (xi) Sony’s ability to forecast demands, manage timely procurement and control inventories; (xii) the outcome of pending and/or future legal and/or regulatory proceedings; (xiii) shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment; (xiv) the impact of unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment; and (xv) risks related to catastrophic disasters or similar events. Risks and uncertainties also include the impact of any future events with material adverse impact.
Sony Corporation Investor Relations 105
SONY is a registered trademark of Sony Corporation. Names of Sony products and services are the registered trademarks and/or trademarks of Sony Corporation or its Group companies. Other company names and product names are registered trademarks and/or trademarks of the respective companies.