Sony is on track to record its highest annual profits in 20 years. And it is no fluke. Some five years ago Kaz Hirai was voted in to lead the company towards what he called ‘One Sony’. In 2012, Hirai identified three markets that he wanted to focus on: digital imaging, gaming and mobile. Just five years later and Hirai’s plan is proving itself to be a success.
In a vote of confidence for Sony’s turnaround plan, the firm’s shares have risen by around 40 per cent this year to a nine-year high. Profit has increased 2.8 times to $1.43 billion in April-June, exceeding the previous first-quarter record of 121.3 billion yen set in 2007, and things are looking even rosier for the rest of the year ahead.
The profit surge is mainly due to Sony’s image sensor business. Sony’s semiconductor division, which includes image sensors, posted an operating profit of 55.4 billion yen, reversing the year-earlier loss of 43.5 billion yen, as operations at a key plant fully resumed to meet brisk demand for image sensors for smartphones. Bloomberg believes that Sony sensors are now found inside half the world’s phones, proving that Hirai’s vision has paid off.
The consumer electronics arm of Sony also saw a return to profits with a focus on television sets and smartphones. Cost-cutting, less money spent on research and development all within the smartphone division as well as increased device sales have also boosted the coffers.
The firm is now on track to record an annual profit of 500 billion yen. It would be the highest recorded profit since the company made 526 billion yen in the year ended March 1998, when it enjoyed strong sales of its first PlayStation games console and other electronics. In summary, Hirai’s master plan appears to be paying off and Sony is on the rise again.