Sony senses new dimension

Sony chairman Howard Stringer forecast 3D movies, pictures and games will be the electronics maker's next US$10 billion ($13.7 billion) business, challenging investors and analysts who say the technology isn't ready to become mainstream.

The maker of Bravia televisions and PlayStation 3 game consoles said this week 3D-related products, excluding content, will generate more than 1 trillion ($15.5 billion) in the 12 months ending March 2013.

The Tokyo-based company will begin offering TVs, Blu-ray players and game consoles that adopt the technology starting next fiscal year, it said.

Stringer's bet that 3D will spread from the movie theatre to the living room highlights part of his strategy to revive a company that's forecasting its first back-to-back annual losses in half a century.

The move may signal a shift in focus as the Welsh-born executive nears his target of cutting 330 billion in costs by eliminating 20,000 jobs and shutting 10 factories.

"I doubt 3D will become a hit," said Naoki Fujiwara, who helps oversee US$4 billion as chief fund manager at Shinkin Asset Management in Tokyo. "Investors want to see how the company will make money."

Stringer also plans to drive sales growth by offering electronic-book readers and connecting products through networked services, a business Sony projects will generate 300 billion in the year ending March 2013.

The company plans to invest 100 billion to research and develop electric-car batteries, said Hiroshi Yoshioka, head of the Consumer Products and Devices division.

Sony is not alone in pushing 3D. Osaka-based Panasonic and Tokyo-based Toshiba also aim to introduce 3D TVs by as early as next year as Japanese electronics makers seek to compete against South Korea's Samsung and LG.

Kyung-Soo Ahn, the executive vice-president in charge of Sony's business products unit, said this week sales of projectors, cameras and other equipment capable of producing 3D images are expanding faster than expected.

The company has received orders for more than 10,000 3D projectors as movie theatre companies adopt the technology, Ahn said.

Stringer, 67, said Sony's reach in the entertainment industry puts the company in position to lead the 3D market.

The company's movie unit, producer of 2012 and Michael Jackson's This Is It, is Hollywood's third-largest studio, generating US$1.3 billion in ticket sales this year through November 15, according to researcher Box Office Mojo.

"Sony is the only company with end-to-end filming production, 3D conversion, home delivery and home display of 3D content," Stringer said in briefing in Tokyo.

"This is another example of how the breadth of Sony's operations give us a significant advantage versus the competition."

While Sony hasn't disclosed prices of its 3D TV models, Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities, said such sets will probably be too expensive initially to attract a mass audience and would take years to penetrate the market.

- BLOOMBERG