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Fri, Jun 22, 2007 - Page 10 News List

Sony chairman promises turnaround

SKEPTICISM Investors demanded Sony executives come up with a concrete strategy on how they plan to deal with Nintendo's Wii challenge and catch up with Apple's iPod

AP , TOKYO

Sony Corp CEO Howard Stringer, right, poses with Chinese students during an event held in Beijing on Oct. 30. Stringer vowed yesterday to shift the struggling electronics giant from recovery to growth.

PHOTO: AP

Sony Corp chairman Howard Stringer promised yesterday to shift the struggling electronics giant from recovery to growth and to boost PlayStation 3's (PS3) games lineup, calling the console a key profit driver despite its bungled rollout.

But investors at the company's annual shareholder meeting in Tokyo remained skeptical of an imminent turnaround, pressing Stringer for a clear strategy on how Sony intended to recoup losses at its video games unit and catch up to rivals like Apple Inc in portable music players.

"We will shift Sony from recovery to profitable growth," Stringer told about 7,000 shareholders gathered in Tokyo, saying Sony's integrated approach to electronics, games and entertainment made it a "dominant" firm in the digital age.

Other Sony executives said the company's key electronics sector was also regaining its health on booming flat-panel TV and digital camera sales. The company maintained its upbeat forecast for record fiscal year earnings.

The bullish tone signals that Sony may finally be rebounding from a host of recent mishaps, including the PS3 game console launch and a massive battery recall that widened recent losses.

Stringer, who is also chief executive, said the PS3 was "a key driver" of future growth despite a rollout marred by embarrassing delays, production shortages and intense competition from Nintendo Co's popular Wii console.

Sony shipped 5.5 million PS3 machines in fiscal year through March, fewer than the 6 million the company had targeted and losing out to Nintendo, which shipped 5.84 million Wii machines worldwide during the same period.

A price tag set below production costs has also eroded profits, and Sony has warned its gaming division will be in the red.

"All the production problems have been solved. We are making a comeback already," said Stringer, promising to boost game offerings and bolster the machine's networking platform.

"We always lose money in the hardware initially, and we recover that money gradually," he said. "We believe that the PS3 going forward will be vital to our future, and succeed."

Sony's newfound confidence also demonstrates the key strides it has made in catching up to rivals like Sharp Corp and Samsung Electronics Co in flat panel TVs and other products.

Pressed by shareholders at the meeting, Stringer said that Sony would not repeat its blunders in ceding dominance in the portable music player market to Apple Inc's iPod.

Sony was making a comeback as the market moved toward video-equipped players and as more customers listened to music on their mobile phones, he said.

"We have worked very hard to catch up so that in the age of video we will not suffer as much as we did in audio," he said.

"More and more customers are getting their music downloads on their mobile phones, and in this case, the Sony-Ericsson mobile phone is a great success and we have sold as many of them as iPods," he said, referring to Sony's joint venture with LM Ericsson.

Sony president Ryoji Chubachi maintained a bullish earnings forecast for this fiscal year, saying he expected profit to more than double to a record ¥320 billion (US$2.7 billion) from ¥126.3 billion the previous year on strong demand for liquid-crystal-display TVs, camcorders and digital cameras.

Last year, Sony's popular Bravia flat-panel TVs grabbed top world market share in the sector measured in sales, he said.

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