After four consecutive years of losses, Sony Corp. is replacing chief executive officer Howard Stringer with the head of the company's consumer electronics business, Kazuo Hirai.
Hirai, 51, will become Sony's youngest CEO ever.
Hirai will face major challenges as he tries to prop up the deflated brand equity of Sony, who recently shutdown the Walkman product line. Sony is struggling to find positioning in the electronics manufacturing market, which is dominated by personal computer brands such as Apple Inc., who recently became the top PC maker, and South Korean-based Samsung Electronics Co., one of the top TV manufacturers in the world.
Kaz is a globally focused executive for whom technology and the cloud are familiar territory, content is highly valued, and digital transformation is second nature, Stringer said in a statement. I believe his tough-mindedness and leadership skills will be of great benefit to the company and its customers in the months and years ahead.
Sony's TV department is forecast to lose 262.5 billion yen in two years to March 2013 because of strengthening yen against the dollar and euro, according to Business Week. The appreciating yen makes exporting televisions less competitive than South Korean brands since the won is depreciating.
Sony was worth roughly $100 billion at the fourth quarter of 2000, but has dropped significantly since that time. It is currently valued at roughly $18 billion. Though Sony is still the world's third largest television maker, it reduced annual sales projections in November from 22 million to 20 million.
Television sales have historically been important for Sony. The company became a household name in the late 1960s, when it released the Trinitron color television.
In addition to increasing television sales, Kirai will need to sustain success over the consumer electronics and video game divisions from which he came.
Sony sold more than 6.5 million PlayStation 3 units worldwide during the final weeks of 2011. Though the annual sales of the PlayStation 3 remain strong, it is still being outsold by the Microsoft's Xbox 360 each month in the United States according to CNET.
While it's apparent that Sony is no longer the force in consumer electronics that it once was, Hirai will aim to continue driving the successful video game division while reinvigorating the legacy product lines such as the TV division.