Sony Corporation’s revenue from India dropped 9% in the year ended March 2016 – possibly declining for the first time – as the company moved away from the large market and the share of smartphones decreased. The Japanese company is expecting 20% growth this year, helped by strong sales of television sets.
“We have made a more drastic shift from entry to premium. A big chunk of the mass market lies at the entry level that we are now leaving, so the turnover has dropped,” CEO Kenichiro Hibi said.
The company has moved away from mobile phones for the masses, which make up almost 80 per cent of the market in India, to focus on the mid-to-premium segment.
Hibi said the drop in revenue was expected. “This is quite in line with our projection, so it doesn’t surprise us at all,” he said.
Revenue for 2014-15 was Rs 11,010 crore and included the Vaio laptop business, which was sold in 2014.
While admitting that increasing revenue levels would be “quite challenging,” Hibi said Sony’s concentrate on the premium segment, coupled with the rise in demand for smartphone accessories and audio systems, will help net a larger turnover this year and recover from the fall.
Sony rivals with Apple and Samsung Electronics in the premium segment which almost have split the market between themselves.
In televisions, Sony claims it has a 25 per cent share through its Bravia series and aims to increase it to 30 per cent this year, foreseeing that consumers would upgrade to bigger screens. Revenue from TVs rose 20 per cent from a year earlier, the company said.
Sony will face competition from a plethora of Chinese companies, besides existing market leaders Samsung, Micromax Informatics and Intex, all of which have either a sizeable presence in consumer durables or are increasing their portfolio in televisions, washing machines and other product lines.
Sony plans to increase the manufacturing capacity of TVs at the Foxconn plant near Chennai, where it presently makes six models.
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From ITVoir News Desk