Sony Corp Chief Executive Howard Stringer said the loss-making Japanese electronics conglomerate's turnaround efforts, which include job cuts, plant closures and a management reshuffle, are advancing well.
Sony last month forecast a second straight year of losses as the global recession batters demand for electronics. To get back to growth, it is implementing far-reaching restructuring such as reducing its workforce by about 16,000 people and closing eight of its 57 manufacturing sites.
We are seeing steady progress and are working to reduce costs throughout the Sony group by more than 300 billion yen ($3 billion), Stringer told the company's annual shareholders' meeting on Friday.
He said the company was determined to fight back in the market for networked electronics, where it lags behind Apple Inc's iPod and faces stiff challenges from Microsoft Corp's Xbox 360.
Sony has set up a new business group focusing on network-oriented products and services, such as PlayStation video game operations and Vaio personal computers.
In the 20th century, this company created great champion products ... In the 21st century, other companies took our hardware like the Walkman and added network capability and turned it into the iPod, Stringer said.
We are not going to be beaten again in the network age.
Sony used to rule the portable music player market with its Walkman and the video game industry with PlayStation consoles. But 30 years after the launch of the Walkman and 15 years since the debut of the PlayStation, the iPod and the Xbox 360 are eroding Sony's market share.
In a bid to boost its products' appeal in the network age, in which gadgets are becoming interconnected and music and video content is delivered online, Sony said last year it aimed to make 90 percent of its electronic product categories network-enabled and wireless-capable by March 2011.
The company, which competes with Samsung Electronics Co Ltd in LCD TVs and Canon Inc in digital cameras, has also set up a business group to focus on TVs, cameras and camcorders.
Sony shares closed up 2 percent at 2,525 yen following Stringer's comments, outperforming a 0.9 percent rise in the benchmark Nikkei average.
Welsh-born Stringer took the helm at Sony in 2005 vowing to deliver growth and get its various divisions to work closely together to compete with new rivals.
His efforts have been hampered by a stronger yen and sluggish demand for its electronics products, which include Bravia LCD TVs and Cyber-shot digital cameras.
In response to a shareholder who asked whether Sony would be able to adapt to a changing world despite its size and avoid the fate of General Motors, Stringer pointed to the firm's ongoing restructuring as proof of its willingness to change.
Be assured, all of you: Unlike GM, we have a solid balance sheet, and we are not burdened by a significant debt, Stringer said.
One of the reasons we made these transformational changes is so that we can respond more swiftly to all that's happening around this, not just the economy, but in the competitive world.
(Additional reporting by Nathan Layne; Editing by Hugh Lawson)