How have the shortened life cycles affected product features?
If you look at the past two or three years, display technology has improved dramatically from plasma to liquid crystal display. Not only the quality but the size of the screens -- they have just gotten bigger and better. These technologies are quickly changing our product configurations. Hard disks are another example. They're getting smaller and smaller, while capacities are getting bigger.
Was the (revenue) decline from last year due to the effects of a rising competitor in Samsung or just poor operations?
We were behind in some of the products that were demanded in the market. We have adjusted our competitiveness and tuned up our lineup for improved results in the market.
What about Samsung? Many see it as a competitor to Sony, but its major products are semiconductor products and not necessarily consumer electronics.
Samsung is a very basic device company in comparison to LG Electronics, which is more like a branded consumer electronics product company. Samsung's strengths are in the semiconductor market as well as cellphones and some devices. Samsung and Sony have cooperated with each other -- such as in future generations of LCDs, where we have a joint venture -- but I expect them to come further into the consumer electronics field, especially after the success of their cellphones.
The electronics division went through a difficult time last year, but at the Consumer Electronics Show, you said there's a strong recovery now underway. How much of that growth is simply because the bar was essentially lowered versus actual new growth?
This fiscal year, we have better positioned ourselves with an expanded display product lineup, with almost 17 new models, while also introducing a new technology, high-temperature polysilicon LCD, which is what our Grand Wega televisions are based on. Another area we are proud of is the DVD Camcorder, which we feel we have reinvented.
It was available before, but after anticipating that it was going to be popular among all American consumers, we quickly adopted this technology and improved products to make them more user-friendly. Those devices went beyond our expectations.
We also reorganised Sony Electronics in the United States. Where we previously had six divisions, we now have three, and we have a more tightly knit group within Sony Electronics. So we've seen revenue increase. Margins are also improving, as is our cost structure, to yield outstanding results.
Contract manufacturers are playing a bigger role in the consumer electronics world these days, causing prices and margins to shrink faster than many expect. What are some of the advantages and disadvantages of contract manufacturing for Sony?
We expect to maintain our leadership position in terms of developing new technologies, products and markets through further innovations and investments. However, we should also expand our view to be more open to alliances or relationships with contract manufacturers so that we can fulfil some of the areas where we find it advantageous to work with them. Sony used to be more focused on developing its own products, which we will continue to do, but we will expand manufacturing so that we are able to retain our leading positions.
It is important that we identify new technology and that we shorten our lead time in engineering development, as well as our ability to adjust production and supply chain management. Focusing on these things will make us an effective player in this business environment.
