sony ir day 2014-electronics - sony group portal - home

Game & Network Services Segment 3

Mobile Communications Segment 22

Imaging Products & Solutions Segment 36

Digital Imaging Products

Professional Solutions

Home Entertainment & Sound Segment 63

Televisions

Audio and Video

Devices Segment 81

Sony IR Day 2014

Game & Network Services Segment

November 25, 2014

Andrew House

President and Group CEOSony Computer Entertainment Inc.

Group Executive in Charge of Network Entertainment BusinessSony Corporation

Sony IR Day 2014


1. Business Overview

2. Mid-term Business Direction

3. Financial Targets

4. Summary

4

Agenda Game & Network Services Segment

Sony IR Day 2014

1-1. Business Overview

Sony Computer EntertainmentResearch, development and sales of hardware and software for PlayStation®4 (PS4™), PlayStation®3 (PS3™), PlayStation®Vita (PS Vita), and PSP® (PlayStation®Portable)

Sony Network EntertainmentProvide content and services for games, music and movies through Sony Entertainment Network for PlayStation®, Android, iOS based devices


5

Sony IR Day 2014


1993: Sony Computer Entertainment Inc. founded

1994: Introduction of original PlayStation® Introduction of CD-ROM as a major format

2000: Introduction of PlayStation®2 DVD-ROM adaption

2004: Introduction of PSP® (PlayStation®Portable) First portable entertainment system developed by SCE

2006: Introduction of PlayStation®3 BD-ROM adaption

Launch of PlayStation®Network (PSNSM) Global launch of network service

PlayStation®Store (PS Store) Open Enabling digital content distribution

2008: Video delivery service launch on PS Store First service for purchase and rental of video content for PlayStation® platform

2009: Offer 3rd party video services Netflix support on PS3™

2010: Sony Network Entertainment International LLC founded

Introduction of Video Unlimited/Music Unlimited Expansion of service offerings to non PlayStation® platforms

2011: Introduction of PlayStation®Vita Realized ultimate portable entertainment system

2013: Introduction of PlayStation®4 Fastest 10 million units sales in PlayStation® history

The History of Introduction of Platforms and Services


6

Sony IR Day 2014 7

1-2. Regional Headquarters & SCE Worldwide Studios

■ ■

■


Sony Computer Entertainment America, LLC.Sony Network Entertainment International LLC.San Mateo, USA

Sony Computer Entertainment Europe Ltd.London, UK

Sony Computer Entertainment Inc.Sony Computer Entertainment Japan AsiaTokyo, Japan

Japan StudioPolyphony Digital Inc.

Bend StudioNaughty Dog Inc.San Diego StudioSan Mateo StudioSanta Monica StudioSucker Punch Productions

Evolution StudiosGuerrilla GamesGuerrilla CambridgeMedia MoleculeLondon Studio

■ Regional Headquarters

■ SCE Worldwide Studios

Sony IR Day 2014

1-3. Sales by Product/Region

FY2013 Product Sales Ratio FY2013 Area Sales Ratio


8

Net Sales1,043.9 bln yen

Contents &Services

44% Hardware56%

Net Sales1,043.9 bln yen

JapanAsia16%

EuropeMiddle East

Others42%

Americas42%

Sony IR Day 2014 9

1-4. Financial Performance:FY2014 Op. Income increase/decrease factors

Profit improvement in HW• PS4™: Profit improvement due to higher sales• PS3™: Profit reduction due to lower sales despite cost reduction• PS Vita: Profit increase due to new model launch

1

Contents & Services• Game SW: Profit reduction due to reduced number of major titles• Network: Profit increase due to growth of PlayStation®Plus (PS Plus),

game content revenue, video and music services

Negative impact of the appreciation of the USD

2

3

4

FY13 FY14(Forecast as of

October 2014)

FY12

-18.8

Op. Income

1,290

35

Sales

-3.7

1,043.9 749.9

Profit reduction due to increased operating expenses• Decrease in marketing cost related to HW• Increase in network infrastructure related costs

1

2 3

4

(bln yen)


Sony IR Day 2014 10


Expand the PlayStation® Ecosystemby delivering evolved and integrated game & network services

Strategy I : Retain and expand engaged PlayStation® users

Strategy II : Increase ARPPU and drive ancillary revenue

ARPPU = Average Revenue Per Paying User


Sony IR Day 2014 11


MAU = Monthly Active Users

PlayStation 4PlayStation Vita

PlayStation Network

PlayStation®

Users50M+ MAU

Contents& Services

PS4™/PS Vita/PSNSM

PlayStation® Ecosystem


Sony IR Day 2014 12

Retain and expand engaged PlayStation® usersContinuous enhancement of PS4™ game features to maintain and strengthen competitive advantage

Relentless efforts on hardware cost reduction


Deliver new experiences,enhance functions and usability


Sony IR Day 2014 13


Retain and increase engaged PlayStation® usersAcquire casual users while further strengthening the engagement of core gamers through relevant title offerings


Enrich games, video and music servicesfor casual user segment

Additional game title introduction for core user segment

Sony IR Day 2014 14


Retain and increase engaged PlayStation® usersExpand customer base through innovative network services like cloud TV and streaming games


Remove constraints of consoleand waiting time with PS Now

Sony IR Day 2014 15


Retain and increase engaged PlayStation® usersExpand customer base through innovative network services like cloud TV and streaming games


Provide innovative live + DVR experiencethrough the cloud TV service

PlayStation™Vue transforms the TV experience by putting the customer in control and enabling them to experience TV in a more personalized and interactive way

Sony IR Day 2014 16


Retain and increase engaged PlayStation® usersAddressing growth opportunities in markets with economic development and cultural transitions

Markets with future growth potential includingChina and Latin America


Gaming culture transition, e.g. in Germany and the Middle East

Sony IR Day 2014 17


Increase ARPPU and drive ancillary revenueRealize higher conversion rate and improve retention rate of PS Plus by enhancing its user value


Strong online multiplayer titles

Selection of relevant complementary titlesPrioritized invitation for a/b testing

End of Sep 2014

PS4™launched

2010 2013 2017

PS Plus Number of Subscribers

Sony IR Day 2014 18


Increase ARPPU and drive ancillary revenueCreate more demand via personalized TV, Video and Music distribution services

Increase revenue through partnerships with best-in-class services, leveraging an attractive user base


“Just for you” curation for PlayStation® gamers

Original contentprograming

Offer 3rd party video servicesto increase frequency of

console usage

Sony IR Day 2014 19


Expand the PlayStation® Ecosystemby delivering evolved and integrated game & network services

Strategy I : Retain and expand engaged PlayStation® users

Strategy II : Increase ARPPU and drive ancillary revenue

• Continuous enhancement of PS4™ game features to maintain and strengthen competitive advantage

• Acquire casual users while further strengthening the engagement of core gamers throughrelevant title offerings

• Expand customer base by innovative network services like Cloud TV service and Streaming game service

• Addressing growth opportunities in markets with economic development and cultural transitions

• Realize higher conversion rate and improve retention rate of PS Plus by enhancing its user value• Create more demand via personalized TV, Video and Music distribution services• Increase revenue through partnerships with best-in-class services by leveraging attractive user base


ARPPU = Average Revenue Per Paying User

Sony IR Day 2014 20

3. Initiatives to Improve Profitability (FY2014 to FY2017) Game & Network Services Segment

1. Maintain and expand devoted PlayStation® users

2. Increase ARPPU and ancillary revenue

3. Operating expense management

1,400～1,600

1,043.9749.9 1,290

Sales

5%～6%

Operating IncomeMargin2.7%

FY12 FY13 FY14(Forecast

as of October 2014)

FY17(Target)

(bln yen)

Sony IR Day 2014 21

4. Summary

Sales 1,400～1,600 billion yen

Operating Income Margin 5%～6%

FY2017 Financial Targets


Increase sales and profit through expansion of PlayStation® users, providing compelling and cutting edge game/network experiences

Sony IR Day 2014

Mobile Communications Segment

November 25, 2014

Hiroki Totoki

President & CEOSony Mobile Communications Inc.

Sony IR Day 2014



2. FY2014 Operating Performance

3. Market Trends


23

Agenda Mobile Communications Segment

Sony IR Day 2014

Tablet

Accessories and Others

Sales1,191.8

bil yen

Japan

United States

EuropeChina

Asia-Pacific

Other Areas

24

1-1. FY2013 Business Overview

Sales1,191.8

bil yen

Smartphone


FY2013 Sales by Key Product Groups FY2013 Sales by Region

Sony IR Day 2014 25

1-2. Market Share in Key Markets

Source: Sony Mobile

0.7%17.5%8.8%

5.9% 5.4% 6.5%0.9%

Japan

Asia-Pacific Latin AmericaChina

North America

Middle East and Africa

EuropeInside figure: FY13 market sizeOutside figure: Sony share

1.4 trillion yen 4.4 trillion yen 5.3 trillion yen

7.5 trillion yen 3.3 trillion yen 1.8 trillion yen 1.7 trillion yen


Sony IR Day 2014 26

2-1. Changes in FY2014 Operating Income (vs. FY2013)

Unfavorable impact of the appreciation of the US dollar

1

Sales increase, mainly in high-end products2

Increase in marketing, R&D and IP expenses3

Increase in restructuring charges4

Operating Income

1,350Sales

1,191.8766.1

-41.1

12.6

-204

1 2 3 4

5

Impairment charge of goodwill 176 bil yen5


FY12 FY13 FY14

Despite recording a sales increase, mainly in high-end products, a larger operating loss is expected, primarily due to the impairment charge of goodwill, the increase of marketing

expenses, the unfavorable impact of foreign exchange rates, and the expected increase of restructuring charges.

(bln yen)

Sony IR Day 2014 27

2-2. Changes in FY2014 Operating Income (vs. May FCT, excl. impairment charge)

1,530

26

-28

1 2 3 4

May FCT

Oct FCT


Unfavorable impact of the appreciation of the US dollar

1

Decrease in sales in mid/low-end smartphone segment

2

Reduction of marketing expenses and research and development expenses

3

Increase in restructuring charges4

Operating Income

Sales1,350

Operating income is expected to decline sharply versus May forecast, primarily due to the decrease in sales in mid/low-end smarphones mainly in South East Asia, China and

Europe, partially offset by a reduction in marketing and R&D expenses.

(bln yen)

Sony IR Day 2014

0

2

4

6

8

10

12

14

16

18

FY14 FY15 FY16 FY170

5

10

15

20

25

30

35

FY14 FY15 FY16 FY17

28

3-1. Smartphone Market Trends (by price segment)

Value (trillion yen)

Source: Sony Mobile

High-end(> 30,000

yen)

Majority of market value Moderate growth: CAGR around 3%

(FY14-17) Major markets: US, Europe, China

Mid-range(14,000 -

30,000 yen)

Moderate growth: CAGR 3+% (FY14-17)

Decline of ASP due to growth of low-end segment

Major markets: China, Europe, Asia

Low-end(< 14,000

yen)

High growth: CAGR 10+%

(FY14-17) Driving overall ASP declines Major markets: China and Asia

1.23

55%

24%

21%

ASP 22,000 yen 19,000 yen

CAGR (FY14-17)

4.4%

2.7%

Units (billion units)

1.381.52

1.64

27.5 28.9 30.2 31.2

3.3%

11.1%

CAGR (FY14-17)10.1%

2.9%

3.0%

17.5%

55%

22%

56%

22%


* wholesale price

FCT FCT FCT FCT FCT FCT FCT FCT

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

ASP decline in overall market due to growth slowdown in the high-end segment and rapid growth in the low-end segment

CAGR: Compound Annual Growth Rate

Sony IR Day 2014 29

North America:Stable growth, mainly in high-endJapan:

Limited growth

* Trillion yen, FY14-17 CAGR %

Asia-Pacific:Fastest growing market, primarily in low-end

Middle East and Africa:Growth mainly in low-end

China:Market growth slowing down

Europe: Growth in high-end

Latin America:Mid/low-end comprises 2/3 of market

Mobile Communications Segment3-2. Smartphone Market Trends (by region)

Source: Sony Mobile

Growth in China is slowing down, and the market growth will be largely driven by low-end smartphone market.

FY17

FY14 FY17

FY14 FY17

7.9 8.5

FY14

5.8 6.3

FY17FY14

2.2

FY14 FY17

3.64.8

2.5

1.3 1.4

CAGR2.2%

CAGR2.4%

CAGR10.5%

CAGR3.0%

CAGR5.0%

FY14 FY17

4.6 5.1

CAGR3.8%

FY14 FY17

2.12.6

CAGR7.2%

High-end

Mid-range

Low-end

Sony IR Day 2014

6.4

3.9

4.5

6.4

3.7

3.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0

高価格帯

中価格帯

低価格帯

FY14

FY17

10.9

3.5

2.0

9.7

3.0

1.7

0.0 2.0 4.0 6.0 8.0 10.0 12.0

高価格帯

中価格帯

低価格帯

FY14

FY17

30

3-3. Channel Development

Operator Channels Open Channels


Low-end Low-end

Mid-range Mid-range

High-end High-end

Source: Sony Mobile

(trillion yen)

Limited growth in high-end and mid-range in operator channels, but rapid growth in low-end in open channels

Smartphone MarketWorldwide

27.5 Trillion Yen (FY14)

31.2 Trillion Yen (FY17)

Sony IR Day 2014 31

Selection and Focus 1


Reshape corporate structure and drive transformation, particularly in HQ and support functions

Revise sales and marketing strategy by region, and consider transformation in order to improve the efficiency of our investments and enhance profit management



Shift marketing focus from acquisition to retention, utilizing data analytics to improve cost efficiency and marketing effectiveness

Mobile Communications Segment4-1. Mid-term Business Direction

Streamline product portfolio, and improve efficiency of both hardware and software development in order to enhance cost competitiveness

Selection and Focus:Transforming to better compete in the quickly moving mobile industry

Sony IR Day 2014

4-2. Sales & Marketing Set-up (current) Mobile Communications Segment

32

Sony IR Day 2014

4-3. Streamline Product PortfolioCompany A Company B Company C Company D

Approx. 70% reduction

Average of the above four companies

Sony Mobile





Approx. 50% reduction Approx. 30%

reduction

Source: Sony Mobile

Improve profitability by reducing number of products, and improving resource allocation per product

33

Sony IR Day 2014

4-4. Marketing Efficiency Improvement

Retention Rate of Xperia Customers- Continuously improving

Net Promoter Score of Xperia Customers- Retained customers show high score

35%

50%

0%

20%

40%

60%

2014 2017

Steadily improve retention rate of Xperia customers

* Worldwide

* Net Promoter Score is a KPI measuring customer loyalty.


20

40 43

4

16 16

8

2226

0

10

20

30

40

50

2012 2013 2014

既存顧客新規顧客顧客全体Retained Acquired Total

Source: Sony Mobile

34

20%

25%

30%

35%

Aug'13

Sep'13

Oct'13

Nov'13

Dec'13

Jan'14

Feb'14

Mar'14

Apr'14

May'14

Jun'14

Jul'14

Aug'14

Sep'14

Sony IR Day 2014

4-5. Lower Breakeven Point

FY12 FY13 FY14 FY16


OPEX Operating Gross Margin

2-3% improvement


FY12 FY13 FY14 FY16

2-3 pointsimprovement

Drive transformation to generate stable profit

35

Sony IR Day 2014

Imaging Products & Solutions Segment

November 25, 2014

Shoji NemotoEVP, Corporate Executive Officer

President of Imaging Products and Solutions Sector,President of Professional Solutions Group

Shigeki IshizukaSVP, Corporate Executive

President of Digital Imaging Business GroupSony Corporation

Sony IR Day 2014 37

Agenda

Overview of Imaging Products & Solutions Segment



2. Forecasted Market Trends


Professional Solutions




6. Business Performance

7. Summary


Sony IR Day 2014 38

Overview of Imaging Products & Solutions Segment

HandyCamActionCam

New Camera

Compact Digital Still CameraDigital Interchangeable Lens Camera

(Mirrorless/DSLR)Lens portfolio

Camcorder for Pro-sumers

Sen

sing

M

odul

es

Sec

urity

, F

elic

a, e

tc.

Content Creation

Digital Imaging Products Business Professional Solutions Business

Cu

sto

mer

S

egm

ents

Consumers B2B

System Solution

Imaging Platform

Mission : With continuous innovation in the Digital Imaging category, we aim to firmly maintain Sony’s leading position in the industry and contribute to the Sony Group by generating stable profit

Visual Presentation

Medical


Sony IR Day 2014

FY2013 Sales by Products FY2013 Sales by Region

39


動画

静⽌画

Others

Sales442.7

bln yen

Japan

US

Europe

China

Asia,Middle East & Africa

Others

Sales442.7

bln yen

Category breakdown*1

Video Camera: Consumer Video Camera (“Consumer CAM” *2) *3, Professional Video Camera (“Professional CAM”)Still Camera: Compact Digital Still Camera (“DSC”), Interchangeable Lens Camera (“ILC”), Interchangeable Lens*2. CAM=Video Camera *3. Including Action Camera

VideoCamera

StillCamera

*1. abbreviated name in parentheses () will be used in this presentation

Imaging Products & Solutions SegmentDigital Imaging Products

Sony IR Day 2014 40

1-2. Key Products’ Market Share (Value basis)

No.3Share

FY2013 Still Camera Market

Market Share by Product Category

DSC: 19％(No.3)(Premium DSC*1 share: over 30%(No.1))

ILC (Inc. Lens): 9％(No.3)(Mirror-less camera share: 40% (No.1))

Market Share by Product Category

Consumer CAM: 37% (No.1)(Conventional video camera share: 50% (No.1))

Professional CAM: 48% (No.1)

FY2013 Video Camera Market

Market Size: 2,300bln yen

No.1Share

Market Size: 320bln yen

*1. Premium DSC= DSC with large (1/1.7inch over) imager or high zoom (x20 over)

Source: Sony


Sony IR Day 2014 41

2. Forecasted Market Trends by Product

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

FY14 FY15 FY16 FY17Video Camera Market Still Camera Market

The video camera market is expected to shrink slightly, while the still camera market is expected to shrink significantly. In still cameras, the percentage of mirror-less ILCs will increase

静⽌画市場

動画市場

FY17FY14

FY17FY14

(Thousand units）

Source: Sony

Still CameraMarket

CompositionForecast

Video CameraMarket

CompositionForecast

ILC: Single reflex DSCILC: Mirror-less

Consumer CAM Professional CAM

Expect increase in ratio of ILC, especially mirror-less

No significant change in market composition Professional cameras accounts for 30% on value basis

(Unit Basis)


Sony IR Day 2014 42

3-1. FY2014 Business Outlook and Mid-term Business Direction

0

50

100

150

200

250

300

350

400

450

500

FY13 FY14⾒込

Change in FY2014 Operating Income

Mid-term Business Direction

Aim to sustain highly profitable business by continuously focusing on premium and growing markets while pursuing operational efficiencies

PremiumShift

Operational Improvement

Growth of Lens Biz.

Others

NegativeFactor

PositiveFactor

FY13 FY14(Forecast as of October 2014)

Reasons for Improvement from FY2013→FY2014

① Improvement in product mix due to the shift to premium products (ILC, DSC）

② Growth of “α” interchangeable lens business

③ Improvement in operational efficiency

- Reduction in sales company SGA - Reduction in fixed costs associated with manufacturing- Improvement in development efficiencies by propelling Design Platform

Decline in Shipments

due to Market

Shrinkage


Sony IR Day 2014

Strategy VContinuous Improvement inOperational Efficiency

Strategy IEnforcement of “α” Interchangeable LensCamera (ILC) Business

Strategy IIExpansion of “α” Interchangeable Lens Business

Strategy IIIDSC/CAM Further Premium Shift

Strategy IVApplication of Camera Technology toB2B Market

43

3-2. Mid-term Business Direction


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

ILC: Single reflex *2

ILC: Mirror-less *2

DSC (Premium *3)

DSC (Entry)

Consumer Video Camera *4

Consumer Camera Market *1(Value basis)

*1 Source: Sony *2 Including Interchangeable Lens*3 Premium DSC= DSC with large (1/1.7inch over) imager or high zoom (x20 over)*4 Including Action Camera

Growing Segment

Mature Segment

FY08 FY14FCT

FY17FCT


Sony IR Day 2014

3-3. Strategy I. Enforcement of “α” ILC Business: Activity of FY2013 / 2014

Released Nov. 2013

Optical Low-pass Filter-lessUltra High Resolution (35M pixels)

FY2014The World’s Best Technology in a Compact Body

FY2013Create New Full Frame Mirror-less Camera Market

World’s Highest SensitivityISO409600

High-endUser

Middle＆

EntryUser

＋

＋

Entry and Middle class Mirror-less camera line-up

with top market share

New

World’s First,35mm Full Frame

Released Nov. 2013

World’s Fastest Autofocus*1*1 α6000 as of Feb. 2014

Released Jun. 2014 To be released Dec. 2014

Released May 2014

Released Sep. 2014

Wide-area

Depth

Time

179-point focal plane phase-detection AF sensor

Worldʼs fastest* AF speed of 0.06 sec* α6000 as of Feb. 2014. Based on Sony research

AF algorithm for steadfast andaccurate prediction of next move

World’s First Full Frame ILC with 5-axis image stabilization


Sony IR Day 2014

FY2015FY2014FY2013

高付加価値

普及

４ＫImage Cube

UltimateSpeed

UltimateResolution

UltimateSensitivity

ＡＦ

Image Stabilization

3-4. Strategy I. Enforcement of “α” ILC Business: Our Next Vision

Establish clear differentiation from othersby utilizing 3 key in-house core technologies

Create New Full Frame Mirror-

less Camera Market

The World’s Best Technology in a Compact Body

High-endUser

Middle＆

EntryUser

New


45

Sony IR Day 2014

FY20135 FE lenses

In-house lenstechnologies

Total Lens Line-up*3

FY2013FY2014*1

↓FY2015~(Short term goal)

Branding Strategy

Technology

: 56 Lenses: 64 Lenses

: Over 70 Lenses

Product

Customer

Aspherical Lens Elements

ED (Extra-low Dispersion) Glass

Nano AR Coating Circular Aperture Super Sonic-wave Motor (SSM)Linear Motor

Expansion of FE line-up Rich lens line-up offering versatile shooting options

Cumulative production*2

over 30 mil. unitsFY2014*1

13 FE lenses

FY2015~Over 20FE lenses

Established brand of optics from analog era

Branding mainly for- Wide ~ Standard- Prime type Lenses

Brand lenses with Sony’s cutting edge digital technology

Branding mainly for-Standard to Telephoto-Zoom type Lenses

*2. Total number of Interchangeable lens produced for Sony ILC, including lens produced by Konika Minolta in the past. *1. Including lenses under development and to be released within fiscal year 2014 (~March, 2015). *3. Total number of Interchangeable lenses in Sony ILC line-up.

Accelerate lens business by expanding rich lens line-up, especially on full frame E-mount (FE) lens, and marketing them with “G” brand and “Zeiss” brand backed by cutting edge in-house lens technology

3-5. Strategy II. Expansion of “α” Interchangeable Lens BusinessImaging Products & Solutions Segment


Sony IR Day 2014 47

3-6. Strategy III. DSC/CAM Further Premium Shift

ImageCube

“Pocket-sized, pro performance”Premium DSC with 1.0-type Sensor

“Ultra-sensitive artistry”New 1.0-type back-illuminated Sensor

“Wide angle / High resolution”New large aperture lensNew EVF New image processing engine

ＡX100

PXW-FS7

RX100 (FY2012)

RX100M2 (FY2013)

RX100M3 (FY2014)

Keep competitiveness of premium products by evolving and combining in-house core technologies which realize new photography experiences and customer value

“Your Story. In 4K detail”World’s first 4K Consumer CAMwith 1.0-type Sensor

“Expansion α mount family to professional CAM”

Professional CAM with E-mount Interchangeable lens system


Sony IR Day 2014 48

3-7. Strategy IV. Application of Camera Technology to B2B Market

Planning to expand B2B camera business by applying our strong core camera technologies cultivated in the competitive consumer camera market

Automotive Camera

Machine Vision Camera

Camera Block for Surveillance Camera


Sony IR Day 2014 49

3-8. Strategy V. Continuous Improvement in Operational Efficiency

R&D

Production

Sales

Propel camera design platform to realize engineering efficiencies and reinforce our core technologies

“Be Particular” and “Decide Practically”

Lean management of fixed cost to meet tough business conditions

Streamline sales function in accordance with corporate strategy


Sony IR Day 2014 50

3-9. Summary

-50%

-30%

-10%

10%

30%

50%

70%

90%

110%

130%

150%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

FY14 FY17中期


I. Enforcement of “α” Interchangeable Lens Camera (ILC) Business

II. Expansion of “α” Interchangeable Lens Business

III. DSC/CAM Further Premium Shift

IV. Application of Camera Technologies to B2B Market

V. Continuous Improvement inOperational Efficiency

Key Strategies◆Sales Operating Income Margin

FY14(Forecast as of October 2014)

FY17(Target)

Sustainable high profit business

Decline in Shipments

due to Market

Shrinkage

Premium shiftDSC/CAM OthersEnforcement

of “α” Camera Biz.

Expansion of “α”

Lens Biz.


Sony IR Day 2014 52


FY2013 Sales by Key Business Areas

Three Core Business Areas

Solutions business aimed toward broadcasters’ and other content creators’ mission-critical tasks (Content Creation)

Projection systems for sophisticated and diversified content (Projector)

Medical products and systems using Sony’s imaging and device technologies for capturing, printing, sharing and presenting images (Medical)

Broadcasters

Film Studios Sports Stadiums

Operating Rooms

Endoscopes Ultrasound RadiationExamination Rooms

Digital Cinemas

Home Theaters

Other

Medical

Projector

ContentCreation

Auditoriums

Classrooms/ Meeting Rooms

Imaging Products & Solutions SegmentProfessional Solutions

Sony IR Day 2014

CameraSystem

OtherProducts/Systems

53

4-2. Business Overview - Content Creation

Content Creation – business strengths:

Overwhelming trust from customers derived from Sony’s long-term contribution to their mission-critical tasks

Global No. 1 market share in camera system

Japan

UnitedStates

EuropeChina

OtherAreas

FY2013 Sales by Region FY2013 Sales by Key Products / Systems

Global No.1 in Broadcast Cameras and Camcorders

Archive System

Switchers 4K/HD Live Server


Sony IR Day 2014 54

4-3. Business Overview - Projector

Projector – business strengths:

In-house production of key devices provides us with technological differentiation and high quality

Successful laser light source model that is more advanced than our competitors has allowed us to increase our share in the middle-brightness market

Expansion of market share in high-end home projector with 4K SXRD panel

DigitalCinema

FY2013 Sales by Key Products / Systems Strength of vertical integration

“BrightEra” is the name of our own LCD micro-display device which realizes high picture quality

BusinessProjector

HomeProjector

Phosphor laser light source and 3LCD panel can realize vivid color images

3LCD Laser Light Source Projector


Sony IR Day 2014 55

4-4. Business Overview - Medical

Medical – business strengths:

Global No. 1 market share in medical printers for endoscope and ultrasound systems

Expansion of medical products other than printersExample: head-mount image processing unit for endoscopic image display

Printer & Media

FY2013 Sales by Key Products / Systems Head-mount image processing unit enables more flexible work styles

Global No. 1 in Medical Printers for endoscope and

ultrasound systemsMonitor,Camera,Recorder

*Please note that although this product has been approved in Japan and EU, its launch in other countries has not yet been confirmed.

Conventional laparoscopic procedure

Laparoscopic procedure using Sony’s head-mounted display

Surgeons’ posture and movement are restricted

Enables surgeons to position themselves flexibly


Sony IR Day 2014 56


Utilizing the strengths of the three core businesses, we will reinforce the competitiveness and profitability of each business, and contribute to

stable and sustainable profit for Sony’s electronics business

Content Creation

Addressable MarketCAGR 2-3%

Medical

Addressable MarketCAGR 5-7%

Projector

Installation ProjectorsCAGR 11-13%

*1. CAGR: Compound Annual Growth Rate

Forecasted Market Trends by Business Area (CAGR*1 for FY2014-2017)

Source: Sony


Sony IR Day 2014 57

5-2. Mid-term Business Direction - Content Creation

Maintain competitiveness by offering innovative value in total workflow from acquisition to distribution utilizing the strengths of our camera systems, and respond to customer’s demand for higher resolution and further efficiency

4K for HD solution IP Live Production

Archive System

Create new efficiencies and new business based on customer’s media assets and archives

Media Lifecycle Service

HD Super Zoom

The remote production environment can be easily simplified compared to a conventional system using multiple coaxial cables


Sony IR Day 2014 58

5-3. Mid-term Business Direction - Projector

Elemental technologies necessary to realize immersive “Kando” experience

Continue to invest in “one and only” differentiated technologies

Propose Sony’s unique visual entertainment experience to the customers

SXRD 3LCD

Laser Light Source


Sony IR Day 2014

5-4. Mid-term Business Plan - Medical

Offer innovative products and systems for images in medical workflow by optimizing Sony’s imaging and device technologies and resources

Expansion of products for key accounts Distribution of surgery video in hospitals

*product photos are current model.59


Sony IR Day 2014 60

6-1. IP&S Segment: Change in FY2014 Operating Income

FY13 FY14(Forecast as of October 2014)

FY12

26.3

Decrease in sales as a result of the shrinking consumer digital imaging market

1

Improvement in product mix due to a shift to higher-margin products

2

Reduction of sales, engineering, and production costs

3

4

Operating Income

710.0

52.0

Sales

1.4

741.2756.2

Var.

1

Var.

2

Var.

3

Operating income is forecasted to increase as a result of 1. an improvement in the product mix which covered the decline in sales due to the shrinking consumer

digital imaging market, and 2. fixed cost reductions

Positive impact of foreign exchange rates Var.

4

(bln yen)


Sony IR Day 2014 61

6-2. IP&S Segment: Initiatives to Improve Profitability (FY2014 to FY2017)

Although the market size of our existing commoditized businesses is shrinking, we plan to increase operating income through the expansion of new consumer and

professional businesses, in addition to controlled fixed costs

(-) Market contraction in commoditized existing businesses

(+) Expanding new consumer businessesi.e. Interchangeable lens cameras

(+) Reduction in fixed costs through operational efficiency

(+) Growing Medical & Projector businessesExpand customer value in the Contents Creation business through 4K and IP

1

2

3

41.4

26.3

52.0

X.X

3.5%

7.3% 7

FY12 FY13 FY14 FY17(Target)

650～700710.0756.2 741.2

7%～9%

0.2%

1 2 ３４

(Forecast as of October 2014)

OperatingIncome

Sales

OperatingIncomeMargin

(%)

(bln yen)


Sony IR Day 2014 62

7. Summary

Sales 650～700 billion yen

Operating Income Margin 7 % ～ 9 %


IP&S will aim to generate stable profit by promoting technology-driven product development and

establishing new customer segments


Sony IR Day 2014

Home Entertainment & Sound Segment

November 25, 2014

Masashi ImamuraRepresentative Director and President, Sony Visual Products Inc.

Ichiro TakagiSVP, Corporate Executive / President of Video and Sound Business Group

Representative Director and Vice President, Sony Visual Products Inc.

Sony IR Day 2014 64

Agenda Home Entertainment & Sound Segment

Televisions




Audio and Video





7. Business Performance

8. Summary

Sony IR Day 2014

Japan

UnitedStates

Europe

China

Asia-Pacific

OtherAreas

4K TV

2K TV

FY2013 Sales by Key Product FY2013 Sales by Region

65

1-1. FY2013 LCD TV Sales Unit / Value Share

Sales754.3bln yen

Sales754.3bln yen

#3 #3

FY2013 LCDTV Value Share by Manufacturer FY2013 LCDTV Unit Share by ManufacturerSource: Sony Source: Sony

Home Entertainment & Sound SegmentTelevisions

Sony IR Day 2014 66

1-2. TV Business Operation Sites

＝Transferred site

＝D&D, R&D site

＝Production, assembly factory

Sony Visual Products Inc.

Malaysia Factory

Brazil Factory

EMS

EMS

Shanghai Factory Aichi Inazawa Factory


Sony IR Day 2014

209,600 199,481 188,701 181,897

16,996 33,621 51,906 67,989

0

50,000

100,000

150,000

200,000

250,000

FY14 FY15 FY16 FY17

4K LCD 2K LCD

67

2-1. Forecasted LCD TV Market Trends

82,348 70,240

59,382 51,412

19,395 29,826

37,823 42,826

0

20,000

40,000

60,000

80,000

100,000

120,000

FY14 FY15 FY16 FY17

4K LCD 2K LCD（Thousand Units）

＊ CAGR: Compound Annual Growth Rate

＊ Source: DisplaySearch

（100 mil yen）

8％ 14％ 22％ 27％

Although the market is expected to grow slightly on a unit basis, it is expected to decline on a value basis due to a decline in ASPs.

Even in this environment, the 4K market will grow steadily.

226,596 233,102 240,608 249,886101,743 100,066 97,205 94,238

19％

30％39％

45％

CAGR＊3.3%

CAGR-2.5%


Sony IR Day 2014 68

2-2. Forecasted LCD TV Market Trends by Area

48.2 47.9North America

40.0

China

6.0 8.6

JapanFY14 FY17

＊ Source: DisplaySearch

58.0 62.6Europe

25.7 27.3

Overview by Area (Business Opportunity)

DevelopedMarket

Countries

NA and EU units will remain flat as these markets are mature. Value will decline slightly due to a decrease in prices.

Japan is recovering from the impact of the switch from analog to digital broadcasting. Market is growing on both a unit and value basis, thanks in part to the upcoming Tokyo Olympics.

China

Units will increase slightly but value will decline due to a slow down in the market expansion caused by first time buyers.

EmergingMarket

Countries

Pan-Asia market will grow slightly, especially in India and Vietnam.

LA market is maturing. Units will increase slightly and value will decrease due to a decrease in prices.

FY14 FY17FY14 FY17FY14 FY17

FY14 FY17

Latin America

Developed markets are expected to level out, however emerging markets, especially Pan-Asia, are expected to grow steadily.

48.763.0

FY14 FY17

Pan-AsiaME&A

40.6

-0.5%+8%

+1.4%

+43%

+6%+29%

(Million Units)


Sony IR Day 2014

(1) Differentiation by enhancing basic functions

(2) Selection and concentration of where to use resources

→Profitable business structure even if sales fall by 20~30%

69


Establish a stable, profitable business by differentiating our products and selecting and concentrating where we use our resources

～FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

OP-25.7

Breakeven(waypoint)

OP-69.6

OP-147.5＊

<bln yen>

Establish “Stable Profitable Business”TV Turnaround

Plan

(1) Move away from structure which was based on growth- remove waste and inefficiencies - transform organization, reduce fixed costs - improve quality, closely control inventory,

reduce idle factory spaces

(2) Reduce panel costs- cancellation of S-LCD joint venture

(3) Enhance product competitiveness

Get ticket to enter business

▲Current position

＊ A 60 billion yen loss related to the sale of Sony’s shares of S-LCD is not included.


Sony IR Day 2014

■ Enhance basic functions: Fascinating products that meet our customers’ needs

1) Enhance essential values: picture quality, cosmetic design, ease of use

2) Combine our differentiated technologies and industry standard technologies

- Differentiated technologies: back lights + signal processing

- Commoditized panels

- Utilization of the Android Platform

70


Establish a stable, profitable business by differentiating our products, and selecting and concentrating where we use our resources


Sony IR Day 2014

1) Accelerated decision-making after splitting out the TV Business

2) Reduction of product line-up - 30% reduction from FY2014 to FY2017

3) Clear focus on sales strategy by area - US: Shop in shop - EU: Build up shop front (as an interface to our customers)

4) Further improvement in design efficiency and low cost operations by global mother factory in Malaysia

5) Reduction of headquarter costs and fixed sales cost

■ Selection and concentration Profitable business structure even if sales fall by 20~30%

71


Establish a stable, profitable business by differentiating our products, and selecting and concentrating where we use our resources


Sony IR Day 2014

Audio Growing Category

Audio Others

Video

Others

Sales431.5bln yen

Japan

United States

Europe

China

Asia-Pacific

Other Areas

72

Sales431.5bln yen

Sound Bars

Wireless Speakers

Headphones

Home Video

WALKMAN

System Stereos Amplifiers

*1：”Audio Growing Category” includes Sound Bar, Wireless Speaker and Headphone as its main products.

*1

4-1. FY2013 Business Overview

FY2013 Sales by Key Product FY2013 Sales by Region

Home Entertainment & Sound SegmentAudio & Video

*2: Sales are based on the organizational structure as of October 2014, which includes a transferred business.

Sony IR Day 2014

4-2. Key Products’ Market Share

Headphones

Digital Music Players (WALKMAN)

Wireless Speakers

*1

Sound Bars

*2

#1 in Japan

1位

73

Home Video (Blu-ray Recorders)

#2 since October 2014#1 (latest) as of November 2014＊Source: Sony

*1: EU5: UK, France, Germany, Italy, Spain

*2: EU3: UK, France, Germany

#2※ Japan / US /

EU5

#1※ Japan

#3※ Japan / US /

EU3

#3※ Japan

#2※ Japan

（Value basis）


Sony IR Day 2014 74

4-3. Audio & Video Business Operation Sites

R&D / Design base sites are located in Tokyo (Osaki).Malaysia and Thailand manufacturing sites

also have some design functions.Brazil factory performs local manufacturing.

＝R&D / Design site

＝Manufacturing factory

Sony City Osaki

Brazil Factory

Malaysia Factory

Thailand Factory


Sony IR Day 2014

0

500

1,000

1,500

2,000

2,500

FY14 FY15 FY16 FY17

75

5. Forecasted Market Trends by Product

Product Outlook

Business Opportunity

Home Video

Deliver brand-new audio & visual experiences through improved basic functions and linkage with mobile devices.

Go after remaining players’ profit through efficiency in design & operations.

Audio,Others

Utilize current technology and know-how to respond to changes in the market or customers and expand peripherals.

AudioGrowingCategory

（Headphones,Sound Bars,

Wireless Speakers）

Deliver high-res products with Sony’s original sound technology to meet the growing demand for high quality sound and offer new exciting sound experiences more easily.

（bln yen）

-19%

-17%

11%

-15%

-12%

6%

-15%

-10%

4%

By FY2017, the audio growing category (Headphones, Sound Bars, and Wireless Speakers) will expand to almost 50% of the market, while the Home

Video portion of the market will shrink.

＊ Source：Sony

CAGR -5%

（Value basis）


Sony IR Day 2014 76

Strategy Ⅰ: Deliver the best sound and picture to customers throughhigh value-added products with high-res technology.

Strategy Ⅱ: Strengthen design and operational efficiencies.

Increase sales and profit through high value-added products in the audio growing category (Headphones, Sound Bars, and Wireless Speakers) positioning high-res as our core technology.

Improve profitability by reviewing regional strategy to meet market and competition changes.

Establish firmly profitable structure without relying on sales growth

Strategy Ⅲ: Enhance brand with the best sound & the best picture.

Save fixed costs and loss costs through strong operational ties between design and manufacturing which is led by key factories.

With high-resolution products, raise Sony brand awareness as high-quality sound and picture brand.

6-1. Mid-term Business Direction Home Entertainment & Sound SegmentAudio & Video

Sony IR Day 2014 77

Aim to improve profitability through an expansion of our high-res product portfolio


Expand SONY’s audio products in living roomby its original high-res experience


Sony IR Day 2014

Improvement in model mix, cost reductionSignificant improvement through an increase in high value-added models, and a reduction in material costs

1

78

FY13 FY14FY12

-21.0Reductions in sales company costs2

Increase in design & manufacturing costs4

Negative impact of foreign exchange rates3

13.4

-82.2

1 2 3 4

Significant improvement due to an increase in high value-added models, and a reduction in cost

7-1. HE&S Segment: Change in FY2014 Operating Income Home Entertainment & Sound Segment

Sales 1,016.8 1,199.3 1,230.0

OperatingIncome

*The figures for sales and operating income are based on the organizational structure as of October 2014, which includes a transferred business.

（Forecast as of October 2014）

(bln yen)

Sony IR Day 2014 79

Operating IncomeMargin

Improvement in profitability through product differentiation by enhancing basic functions

1

Fixed cost reductions realized by selecting and concentrating where to utilize our resources

2

Televisionsング

Increase in sales and operating income due to the introduction of premium products such as high-res

1

Fixed cost reductions through efficiencies in design and manufacturing.

2

Audio & Videoプロフェッショナル・ソリューション]

7-2. HE&S Segment: Initiatives to Improve Profitability (FY2014 to FY2017) Home Entertainment & Sound Segment

Sales 1,016.8 1,199.3 1,230.01,000

~1,100

Target a 2~4% operating margin by improving product margins through stronger products and fixed costs reductions.

-82.2

-21.0

13.4

FY12 FY13 FY14 FY17

2～4%

1.1%

-2%

-8%

(bln yen)

（Forecast as of October 2014）

（Target）


Sony IR Day 2014 80

8. Summary

Target a 2~4% operating margin by improving product margins through stronger products and fixed costs reductions.




Operating Income Margin 2～4 %


Sony IR Day 2014

Devices Segment

November 25, 2014

Tomoyuki Suzuki

EVP, Corporate Executive OfficerPresident of Device Solutions Business Group

Sony Corporation

Sony IR Day 2014

Devices Segment



3. Summary

82

Agenda Devices Segment

1 Business policy2 Image Sensor3 Energy

Sony Corporation Investor Relations 83Sony IR Day 2014

FY2013 Sales by Key Products

Devices Segment

Image Sensor

Energy

Storage Media

LSI

Sales

742.3bln yen

★

★

CameraModule

Image SensorMobile, Security cameras, DSLR/DSC320.0

Camera Module Mobile50.0

Energy Polymer, Cylindrical,ESS (Energy Storage)140.0

LSI LSI for Game, Laser, RF SW120.0

Storage Media Tape, Memory, Disk90.0

[Category] [Sales (bln yen)] [Product/Application]Others

* The figures for sales and operating income are based on the organizational structure as of October 2014, which excludes a transferred business.

FY2013 Business Overview

43%18%

83


Devices Segment

Sales & Operating income (bln yen)

27.0

63.0

-16.9

Image Sensor

Energy

Camera Module

Others

FY14October Forecast

FY13Actual

820.0860.0

742.3

Operating incomeSales Operating

incomeSalesOperating

incomeSales

FY14May Forecast

+36.0

+79.9

Sales increased by 16％, OP increased by 79.9 bln yen

◆Changes from May forecast

◆Changes from previous year

Favorable exchange ratesRobust smartphone market conditions (Image Sensor/Energy)Strong demand for power tools （Energy)Profit improvement in image sensors

+117.7

Robust smartphone market conditions (Image Sensor/Energy)Strong demand for power tools （Energy)Profit improvement in image sensorsSales decrease in System LSIs due to the shift from PS3 to PS4Recording impairment loss for Energy’s long-lived assets in FY13

+40.0

Sales increase by 5％, OP increase by 36.0 bln yen


FY2014 Business Overview

84*Operating loss in FY13 includes a 32.1 billion yen impairment charge related to long-lived assets in the energy business.

Sony IR Day 2014

Strengthen profitability

Always be the first in the market

■“Technological differentiation” and advantage-Exceed competitors by strengthening our devicecompetitiveness

-Always be the first to introduce products by advancing technologies and developing cutting-edge technologies

Direction Strategy

Be the source of Sony’s end products’ competitiveness

■“Device innovation”-Increase customer value with system solutions-Strengthen ties with customers and strategic partnership

Mid-term Business Direction Devices Segment

■“Selection and concentration” of business-Concentrate resources to main business areas -Strengthen profitability in mature business areas

■Healthy asset management/Advance investment for future business

85

Sony IR Day 2014

Product Lifecycle Devices Segment

DSBGStrategy

Development Strengthen Reconstruct Terminate

Business Area

Life Space UXWearableAutomotive SystemMedicalARAM system

Image SensorCamera ModuleEnergy

TunerMMICSXRD/HTPSStorage Media

Game/TV LSIConventional-LaserOptical Pickup

DecliningMaturingDevelopmentMarket Introduction

Concentration ProfitabilityAdvanced Investment

86

Sony IR Day 2014

FY2017 Business Portfolio Devices Segment


Expand sales by differentiating technologies in Image Sensors (incl. Camera Module) and Energy


Image Sensor

Energy

Storage Media

LSICameraModule

Sales

bln yen742.3

Sales1,300～1,500bln yen

Others

Others

18%

Energy

Storage Media

LSI

Camera Module

New Biz

15%

Image Sensor


47% of sales 63% of

sales

87

Sony IR Day 2014-20%

0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

CategoryMarket volume as of FY17

CAGR FY13-FY17Sony Share as of FY17

Marketvolume

size

Sony Share (units)

-20%

0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

CAGR55%

FY13→FY17

Compact DSCFY13 FY1751 →13mil.pcs

Smartphone(Main)FY13 FY171,061→1,607mil.pcs

AutomotiveFY13 FY1736 →87mil.pcs

TabletFY13 FY17409→567mil.pcs

ILCFY13 FY1718 →10mil.pcs

CCTV SecurityFY13 FY1797 → 79mil.pcs

IP SecurityFY13 FY1713 →97mil.pcs

Concentrate on expanding market for mobile, IP Security cameras and automotive

Image Sensor Market Overview Devices Segment

CAGR(Units: FY13→FY17)

88*Compact DSC: Compact Digital Still Camera, ILC: Interchangeable Lens Camera, CAGR: Compound Average Growth Rate


0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%



Marketvolume

size

Sony Share (units)

-20%

0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

CAGR55%

FY13→FY17












<<Winning strategy>>

・Strengthen Imaging

・Evolve to Sensing


0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%



Marketvolume

size

Sony Share (units)

-20%

0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

CAGR55%

FY13→FY17
















8.9MP Super 35mm CMOS Image SensorInstallation of a global shutter allowing clear images without motion skew and other rolling shutter distortions

12.2MP 35mm Full Size CMOS Image SensorWide pixel pitch delivers about 3 times sensitivity, about 2.3 timessignal saturation and phenomenal sensitivity up to ISO 409600

Apply phase- and contrast-detection autofocus179 phase detection points phase-detection AF sensor canshoot in 0.06 seconds: the world’s fastest autofocus

α6000

In spite of Compact DSC size20.2MP 1” CMOS Image Sensor

Strengthen Imaging : “New imaging world” realized by Sony’s cameras Devices Segment

91

Sony IR Day 2014 92

Limits of sensitivity

Limits of dynamic range

Limits of speed

Limits of distance

Limits of viewing field

Devices SegmentStrengthen Imaging : Exceed the limits of the human eye

Sony IR Day 2014

Able to switch to 1000fps whenever recording moving images

Devices SegmentStrengthen Imaging : “1msec world”

93


0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%



Marketvolume

size

Sony Share (units)

-20%

0%

20%

40%

60%

80%

100%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

CAGR55%

FY13→FY17
















■Realize imaging quality/function/usability with technologies in high-end DSC

■Improve video functions■Thinner

Drive development in wearable products

Further improve the value of smartphoneNo.1 share in smartphone marketImage Sensor technologies

Improve automotive safety

Devices Segment

1

Front CameraCrash prevention

Driver monitorSight Tracking

High beam ControlEnsure viewing field

Back mirror CameraGlare-proof

Side ViewSwitch to side mirror

Su

rrou

nd

View

Parkin

g A

ssist

Rear/Surround ViewParking Assist

Evolve to Sensing : Entry into automotive & wearable world based on strengthening imaging technologies

95


System

＋

System SolutionCamera Module

Image Sensor

Assembly technologies Information system technologies

Camera signal-processing technologies

Column-parallel ADCBack-illuminated

structureStacked structure

Dual Cameras

Compact/Thinness

Embedded

Technologies

Target

High speed(Low power consumption)

High sensitivity

High resolution Depth Sensing

Extraction

Recognition

Z1 6.321 mm Z3 5.632 mm

Super high resolution

11％ thinner

Smile ShutterPS4 Face log-in

6 axis correction

Devices Segment

Degree of eye opening & Closing

Shape of outer eye area

Shape of wrinkle

Degree of mouth opening

Shape of corners of the mouth

Evolve to Sensing : Meet customer needs by Module & System Solution

96


System

＋

System SolutionCamera Module

Image Sensor

Assembly technologies Information system technologies

Camera signal-processing technologies

Column-Parallel ADCBack-illuminated

structureStacked structure

Dual cameras

Compact/Thinness

Embedded

Target

Depth Sensing

Extraction

Recognition

Devices Segment

Technologies

High speed(Low power consumption)

High sensitivity

High resolution

Smile ShutterPS4 Face log-in

Evolve to Sensing : Meet customer needs by Module & System Solution

97

Sony Corporation Investor Relations 98Sony IR Day 2014 98

Recognition/Distance High-speed processing

High-speed readout and processing realized by high-performance image sensors and back-illuminated structure

Extraction

Able to capture clear images even in bad weather

Able to capture fast-moving subjectsAble to accurately calculate distances quickly

Images that surpass the limits of the human eye are delivered by system LSIs cultivated in TV image processing

Devices Segment

Under study for LIDAR using SWIR Backlight correction

Defog

Source: Ishikawa Watanabe Laboratory, The University of Tokyo

Diffusion

IM

SWIRPulseLaser

Filter

Evolve to Sensing : New functions delivered by system solutions

Recognition/Distance realized by the combination of dual cameras and signal processors

Sony IR Day 2014

FY13 FY14 FY17

Mobile

Sales target by category

+118%

Mobile

Non-Mobile

Includes camera module

Non-Mobile

Main business for further added value

Smartphone

TabletApplication:

Base business for utilizing technological advantage

DSC/CAM/DSLRProfessional CameraSecurity Camera

New Business

New Business

MedicalAutomotive

Business for meeting customer needs by System Solution

-9%

Devices Segment

Application:

Application:

Business Scenario by Category

Scenario: Entry into Chinese smartphone makers+52%

99

Sony IR Day 2014 100

Image Sensor Wafer Production Capacity

50

25

60

Proactively execute domestic investment

Nagasaki TEC Kumamoto TEC

＜Recent investment＞ (bln yen)

・Press Release in Sep 2010, Kumamoto TEC approx. 40・Press Release in Dec 2010, Nagasaki TEC approx. 100・Press Release in Jun 2012, Nagasaki TEC approx. 80・Press Release in Jan 2014, Yamagata TEC approx. 35・Press Release in July 2014, Nagasaki/Kumamoto TEC approx. 35

75

Yamagata TECDec.2010

Mar.2012

Nov.2014

2015～2016

Studying further capacity increase

(300mm wafer basis; unit: 1,000 wafers/month)

Devices Segment

Sony IR Day 2014

FY13 FY14 FY17

AV/IT

Non-AV/IT

Branded business

Sales target by category

+25%

+60%

+10%

For AV/IT Linked with Sony’s core business by utilizing

gel polymer batteries

For Non-AV/ITQWEE566

New market creation by Olivine-type batteries

Branded batteries

Stable business with Sony brand & battery technology

Devices Segment

SmartphoneWearable

Application:

Scenario: Entry into major smartphone makersEntry into Chinese smartphone makers

Power toolESS (Energy Storage system)Automotive

Application:

Scenario: Entry into Megawatt level large-sized ESS Establishment of JV with Hydro-Québec

No.1 in quality in the industry

Business scenario utilizing technology differentiation

101

Sony Corporation Investor Relations102

Sony IR Day 2014

Devices Segment

More stable structure of gel polymer compared with competitors’ electrolyte

Gel electrolyte keep steam pressure low even if the temperature rise

Low swelling ratio

Gel electrolyte

electrolyte

Gel electrolyte is flame-retardant

Material development ＋Basic research

Product design

Koriyama plantAtsugi TEC

Higher energy density Long life High safety

Realize higher energy density by Sony’s unique gel polymer(gel electrolyte) structure

Company 1

En

erg

y D

ensi

ty

FY2010 FY2012 FY2014FY2005 FY2017Company 2 Sony

For AV/IT Winning Strategy by Sony Gel Polymer Batteries

Period reported at the Energy business meeting held on Apr. 2014

102

Sony Corporation Investor Relations103

Sony IR Day 2014

Li

Fe

P

O

Structure of cathode

highly bound Non-oxide type electrode materials (lithium iron phosphate)

Very safe due to no oxygendissociative adsorptionLong life due to stable structure

charging status FullEmpty

powe

r voltage

discharge characteristic

Capture stable electricity even when charging

Charging time

lithium iron phosphate

Other electrode materials

Pow

er current

Pow

er current

charge characteristics

Realize high speed chargingby high-power charging =high affinity to wind powerand solar power

Devices SegmentFor Non-AV/IT Winning Strategy by Olivine-type batteries

Stable structure＝Safety＋Long life

Stable discharge characteristics＝large-scale system

Quick charge

103

Sony IR Day 2014


Operating Income Margin 10 % ~12 %


Summary Devices Segment

◆Image Sensors: Focus on wearables and automotive in addition to smartphones

◆Energy: Focus on smartphones/wearables, power tools and ESS

Trend from FY2012

△ 4.0

1.0

6.0

11.0

16.0

△ 400.0

600.0

1600.07%

9%～11%

742.3752.7 860.0 1,300～1,500 bln yen

FY14 FY17FY13*FY12

37.2 -16.963.0Operating

Income

Operating Income margin

Sales

5%

10%～12%

-2%

*Operating loss in FY13 includes a 32.1 billion yen impairment charge related to long-lived assets in the energy business.*The figures for sales and operating income are based on the organizational structure as of October 2014, which excludes a transferred business.

(Forecast as of October 2014)

104

(Target）

Sony Corporation Investor Relations

Cautionary Statement

105

Statements made in this presentation with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-lookingstatements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,”“strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with adiscussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materialsreleased to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautionsinvestors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and thereforeinvestors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a resultof new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:( i ) the global economic environment in which Sony operates and the economic conditions in Sony’s markets, particularly levels of consumer spending;( i i ) foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or

in which Sony’s assets and liabilities are denominated;(i i i) Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including televisions, game

platforms and smartphones, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions,rapid development in technology and subjective and changing consumer preferences;

( iv) Sony’s ability and timing to recoup large-scale investments required for technology development and production capacity;( v ) Sony’s ability to implement successful business restructuring and transformation efforts under changing market conditions;(vi ) Sony’s ability to implement successful hardware, software, and content integration strategies for all segments excluding the Financial Services segment, and to develop and

implement successful sales and distribution strategies in light of the Internet and other technological developments;(vii) Sony’s continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to prioritize investments correctly (particularly in

the electronics businesses);(viii) Sony’s ability to maintain product quality;( ix) the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures and other strategic investments;( x ) significant volatility and disruption in the global financial markets or a ratings downgrade;(x i ) Sony’s ability to forecast demands, manage timely procurement and control inventories;(xii) the outcome of pending and/or future legal and/or regulatory proceedings;(xiii) shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;(xiv) the impact of unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the

Financial Services segment; and(xv) risks related to catastrophic disasters or similar events.Risks and uncertainties also include the impact of any future events with material adverse impact.

SONY is a registered trademark of Sony Corporation.

Names of Sony products and services are the registered trademarks and/or trademarks of Sony Corporation or its Group companies.

Other company names and product names are registered trademarks and/or trademarks of the respective companies.

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