'Being close to the user is the only way,' said Hirai Kazuhiro, a man who had taken the helm of SONY five and a half years ago and took the helm of reversing corporate losses.
To date, he has been successful, with Sony (NYSE: SNE) expects to achieve the largest annual operating profit of 4.2 billion pounds for the fiscal year.
You know, when Hirai Fu took over Sony, the company was inundated by a loss of 3 billion pounds of mud.
Hirai Fu is how to make the return of the Sony king, during which the story happened, the current Sony is still facing what kind of challenge? For these questions, we might as well start from scratch.
01
'Last inch' strategy
Hirai enthusiastic support for Japan's 'Kando' concept, that is, through Sony products and consumers to establish emotional contact, bring 'wow' touched, that is, Sony's 'last inch' strategy, in order to stimulate Consumer enthusiasm and brand loyalty.
'My dad and my grandfather were both Sony's loyalists,' he said. 'When I was about five years old, my dad recorded my voice on his open cassette recorder and played back again. My voice is really a technological miracle.
'My family had a huge TV set and a five-inch mini-TV at the same time. I found out that Sony can miniaturize these products just so well.'
But when Hirai Fu took over as chief executive, Sony's exciting wow factor has subsided.
'Sony's products need both functional and emotional value,' said Hirai Fu, who poured every business into Kando's philosophy and reinvigorated Sony's past glory.
'In today's commoditized world, anyone can deliver the functional value of a product, but the emotional value that is part of Sony's DNA and design philosophy that has been unique since Sony was founded 71 years ago. Lost this part of the value, and my job is to revitalize our sense of pride in providing emotional value.
One of Kando's avid demonstrations is Sony's redesigned robot dog, aibo, which showed off Sony's artificial intelligence and robotics by mimicking the real characteristics of pet dogs: aibo can perform face recognition and speech recognition, Sensors built into the head, chin and back allow it to respond to the physical stimuli from outside.
As the latest iteration of the robot playmate, Aibo has a lovely appearance, flexible movement and high responsiveness, and through daily interaction, its relationship with the owner will become more and more intimate and will also cultivate its own unique personality .
Hirai Fu said that the technology used in Aibo (such as artificial intelligence, robotics, etc.) can also be copied to the robot used in transportation, education and medical fields.
02
Familiar with the firefighters
Located in the United States, Los Angeles, California, Sony Pictures Plaza (Sony Pictures Plaza)
Hirai pointed out: 'If there is a challenge in the field of organization or finance, I have to handle it in person, and when the business is running well, our good managers can fully uphold their day-to-day operations. But in times of crisis, one must stand up and work hard Work to stop the spread of the crisis and reverse the adverse situation. '
Hirai's cronyism leader in handling crises was promoted in Hollywood under the tightest and most tense shock of the recent sexual harassment scandal, which was exactly where Hirai was husband after a destructive e-mail scandal in 2014, Trying to expand Sony's positive corporate culture influence.
He said: "At Sony, we absolutely have zero tolerance not only for sexual harassment but also for any type of harassment, and we want to provide a safe, comfortable and trusting environment for our employees around the world.
'We have about 120,000 employees and have policies in place to ensure that employees and managers understand that Sony has zero tolerance for these incidents and that employees should feel comfortable spontaneously and report to management as quickly as they can. Cases will be investigated and will be taken immediately if appropriate action is required. We have well-established policies and will continue to strengthen our policy in this area. '
From February to August last year, Hoki-Nako looked for a new head of Sony Pictures Entertainment for the company after Michael Lynton switched to Snapchat, where he worked for Sony Pictures Entertainment every month at his studio in Culver City, California Two weeks.
He said: 'I want to get a better understanding of the business, and I want to have a clear dialogue with potential candidates so that I can answer every one of them and say exactly what I want them to do. '
As he works in California, he walks around the studio, chatting with regular staff and understanding their problems and motivations. "Sony Pictures is a big business and I need to be careful and not hurry. I hope people will see me walking from one end of the studio to the other and communicating fully with employees.
Through these interactions, I communicated to them that the group president from Tokyo is willing to spend two weeks a month understanding and finding the right CEO for him. The culture of Sony Pictures Entertainment has taken place Change, because people understand Tokyo headquarters is their strong backing.
03
Great design should be inherited
Visitors and media reporters visited the PS4 game console at the 2013 Tokyo Game Show
Hirai has reversed every business he leads, and when he became president of Sony in 2006, the PlayStation division posted a loss of 230 billion yen after the start of the PS3, which heralded the creation of new departmental managers who Developed PS4 very successful.
Hirai's strategic focus is to create enduring brands that include a transformation of Sony's product design culture.When Hirai became CEO of Sony, Sony's products are like ordinary consumer electronics products, each iteration of the product Redesign.
'I've talked to the heads of each product category:' If you think this is a great design, do not rush to change it, take pride in what you do, and stick with it. '
'This is a cultural change we brought in. This shows Sony's respect for the products it manufactures and if it is good enough for its customers, we do not need to change the design each year, which is how we create the emotional value of our products.'
The company's high-end RX series of cameras and headsets prove the effectiveness of this approach, but beyond consumer electronics, Sony's business focus has shifted to artificial intelligence, robotics, image sensors (through its semiconductor business), and worldwide ownership 70 million users of PlayStation game consoles.
Sony introduced the PlayStation 4 in 2013, the PlayStation 4 Pro in 2016, and the PlayStation VR in 2007. As VR technology continues to improve, PlayStation VR will help drive the growth of console sales.
With the increasing popularity of VR technology in the video game industry, it is expected that Sony will fully support the development of PlayStation VR and even provide VR game products to PlayStation Plus users free of charge.
PlayStation VR devices have sold more than 2 million PlayStation VR games since its launch in October 2016. With the introduction of multiplayer games like Call of Duty and Madden NFL, the PlayStation VR devices' Sales will grow.
So far, Sony has sold 70.6 million PlayStation 4 consoles and 617.8 million PlayStation 4 games to date, and the PlayStation 4 is rapidly approaching the overall sales of the PlayStation 3. The PlayStation 3 has sold 80 million copies throughout its life cycle Taiwan, PlayStation 2 is the best-selling video game ever, sales reached 155 million units.
Earlier, Goldman Sachs released research report that investors should not just stare at the sales of game consoles in the new trend, Sony's gaming network business will become the key in the past few years, Sony's gaming network business experience and Chennai Similar to the rapid growth of the network business, taking into account the unique advantages of the network business, which is also likely to become the main reason for the game industry Nai Fei.
Given the large user base of the Sony PlayStation and the MAU (monthly active users) with a high PlayStation Plus membership, the company is likely to create a network-centric, game-centric, integrated service (games, movies, music, etc.) Part of the current momentum of development also validates this.
However, Hirai Fu is not content with the PlayStation's leading position in the game and a series of recently released Sony Pictures blockbuster movies, he said in an interview, Sony Pictures in 2017 a great influence, but the need for a sustainable Mode of development last year, "Spider-Man: Return of the Hero," a great success, which means that Sony in the future DVD, Blu-ray there will be a lot of business about Spider-Man authorized.
Last year's release of "Spider-Man: Hero Returns"
The U.S. broadcaster Tigner (NYSE: TGNA) and Sony Pictures announced in mid-January that the two companies have signed a multi-year exclusive contract whereby Sony Pictures broadcast all of Tigner's original television shows in the United States and other parts of the world Including Daily Heavy News Live.
Then on January 26, Sony announced a milestone strategic sponsorship deal with Blue Note Media Group.
As part of the sponsorship, Sony will work with Blue Notes to open a new 'Sony Concert Hall' in Manhattan with plans to open in the spring of 2018 and announced it will sponsor the annual Blue Jazz Festival in New York in June Wait.
Blue Notes Media Group, an affiliate of Blue Notes Entertainment Group, owns, operates, licenses or manages 10 music venues worldwide, including the iconic Blue Note Jazz Club.
04
Inflection point still worries
Indeed, Sony is gradually recovering the hearts of consumers under the leadership of Hirai Fu, many people have always been its hardcore fans, but even so, the current rapid changes in consumer electronics, Sony's road to recovery is also under pressure.
Over the past 10 years, Sony has not stopped moving forward, but also drastically reorganized its business.But the problem is that in many of the business, some did perform well, while others become a drag on the business.
As shown in the above figure, Sony's FY17 semi-annual report shows very clearly which businesses will contribute to the company's performance and which should be gradually reduced in the future.
'1' mobile communications business is the biggest pain point
For the company, the mobile communications business has always been a pain point.Although the first half of mobile communications revenue and comparable to the same period a year earlier, largely due to the benefits of foreign exchange, even though, operating profit from 4.2 billion yen a year earlier dropped to 1.2 billion yen.
The smartphone market is still growing, but much of that growth has come from emerging markets dominated by low-cost Android handsets. In addition, competition in the smartphone space is fierce, largely driven by Apple (NASDAQ: AAPL) And Samsung (OTC: SSNLF) play a leading role.
Market research firm IDC has expressed the following view on the future of the smartphone industry: It is estimated that by 2021, smartphone shipments will increase from 1.47 billion in 2016 to more than 1.7 billion; in 2016, the smartphone market shipments only An increase of 2.5%. However, the demand of new subscribers and the relatively stagnant replacement period of up to two years will bring the compound annual growth rate of the smart phone market to 3.3% in the next few years.
For Sony, the figures above are crucial because it is competing with many competitors in the smart phone market, leaving little profit for Sony, which has been the single dominant player in Apple and Samsung for the past five years. At present, the growth rate of the smart phone market can only be said to be a reasonable level, far from the explosive growth that has ever occurred.
The forecast from research firm BI Intelligence (pictured above) is slightly more optimistic, but the reality is that today's smart phone market is no longer an overwhelming event, and in many developed countries smartphone penetration has surpassed 80% , The growth momentum is also only from the demand of alternative cycles (as shown in the picture below, the global level is about 21 months).
If the alternative cycle to maintain the level of about two years, the smart phone industry revenue is flat at most.
Given these factors, the developing market will be the last bastion of smartphone sales growth, but the problem is that if only Apple and Samsung are capable of earning money in developed markets, then for Sony's smartphone business, How much is the odds of emerging and developing market profits at a much lower price (as shown below)?
This set of figures shows the decline in Sony's mobile communications business in recent years: from ¥ 1,140 billion in 2015 to ¥ 759.1 billion in 2017.
Some people suggested Sony handsets should surrender, but Kazuo Hirai did not agree with this:
"The reason we did this is not because we think smartphones are the way to go in the future, but because we have to have some devices connected to the web for communication, and if we leave this space for exchange, we miss out on the next paradigm shift '
(Sony's mobile division) is not focused on smartphones today, but more on smartphones - that's what we're going to do and be part of this emerging field, ideally a market leader For this strategic reason, I want to make sure we stay, not to stick with the smartphone business, but to keep up with the communications business.
Emerging businesses such as '2' image sensors are still to be expanded
JP Morgan Chase downgrade Sony rating from 'overweight' to 'neutral' last week on the grounds that a decline in demand for the Apple iPhone X will result in a sharp drop in demand for smart-phone camera image sensors this year. Image sensor business accounts for about Sony's total revenue 9%, slightly higher than the film and music business.
'At the moment, the main drivers of the image sensor business are smartphones, digital cameras and security surveillance and IoT devices, and we need to make sure we have a stable revenue stream right now so that companies can move forward in the future about the automotive business '
Hirai joked that Sony's image sensors supply 'a handful' of companies in Cupertino, South Korea and China, in fact Sony's image sensors are commonly used by leading smartphone brands but their own smartphones are in Japan Survival difficult places outside.
Sony is currently seeking new applications for sensors, robots and even auto-driving AI technology, for example, Sony said its market-leading image sensors will help the vehicle better visualize the environment than the human eye does. The use of wide-angle lens to bring a better horizon, and can be adjusted according to changes in lighting conditions in real time.
Hirai Fu announced a partnership with leading automakers at the 2018 International Consumer Electronics Show (CES) in Las Vegas earlier this year, but acknowledged that it is still an emerging business and is expected to expand in recent years Will not bring too much revenue.
05
It is not yet time to celebrate victory
Sony's reorganization seems to have been some gains, market analysts for Sony's second-quarter earnings that Sony's new and old business 'well organized' is expected full-year profit up 20% .Remember, when Hirai Kazuhide took over Sony, the company Loss of 3 billion pounds.
But Hirai is not complacent: 'It is not yet time to celebrate the victory because there is still a quarter of a second before the end of the fiscal year, and we have to make sure we reach that number and even do better.' One of the jobs.The second job is to make sure that we do not fall from a height as we did before, but keep going up.
Hirai Fu said: 'We will invest in the future of technology and business models are actively involved in the business in order to own the company delivered to the next generation to maintain the good state of the company.'