Sony IR Day 2014 · Including Action Camera Video Camera Still ... Key Products’ Market Share (Value basis) No.3 Share FY2013 Still Camera Market Market Share by Product Category

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

Digital Imaging Products

1. Business Overview

2. Forecasted Market Trends

3. Mid-term Business Direction

Professional Solutions

4. Business Overview

5. Mid-term Business Direction


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

1-1. Business Overview

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

Digital Imaging Products

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

4-1. Business Overview

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

5-1. Mid-term Business Direction

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 %

FY2017 Financial Targets

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

establishing new customer segments


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.

Documents

Sony IR Day 2014 · Including Action Camera Video Camera Still ... Key Products’ Market Share (Value basis) No.3 Share FY2013 Still Camera Market Market Share by Product Category