Sony Corp said it would make a strong push into networked electronics and video download services and aim for the top spot in LCD TVs as the firm seeks to make the most of its hardware and software assets for growth.
The company, which sells PlayStation games and Vaio PCs, said it would aim to double revenues from the fast-growing markets of Brazil, Russia, India and China to 2 trillion yen ($18.5 billion) and invest 1.8 trillion yen in key businesses and technologies as part of a three-year strategy to March 2011.
"So much more opportunities exist outside the core markets of Japan, North America and Europe," Sony Chief Executive Howard Stringer told a news conference.
"Today, over 40 percent of the world's population reside in those BRIC countries and they are a young population." Sony wants to lift return on equity to 10 percent from an average of about 6 percent over the past three years, and reach the 5 percent operating profit margin that eluded it in a previous plan, coming in at 4.2 percent in the year ended March.
"We believe a 5 percent operating margin represents a baseline to continue to lead and innovate. This is what's considered to be the minimum, acceptable level going forward," said Stringer, the first non-Japanese top executive at Sony.
Sony's current return on equity is very low compared with global rivals such as South Korea's Samsung Electronics Co, which boasts 14 percent, and Philips Electronics NV, which registers 23 percent, according to Reuters data.
"That target is a sign of Sony's sense of crisis that it could really become a takeover target if it doesn't lift its ROE to at least over 10 percent," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Sony trails Samsung in the liquid crystal display (LCD) TV market, while locked in a three-way battle with Microsoft Corp and Nintendo Co Ltd in the global videogame industry. As part of its big push into networked electronics and video distribution, Sony, which has Sony Pictures under its wing, will launch a video distribution service on its PlayStation Network starting this summer, playing a catch-up with Apple Inc.
The company plans to broaden the online video distribution service to other key products, potentially including Bravia flat TVs, by March 2011, and make 90 percent of its electronics product categories network-enabled and wireless-capable.