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Annual Report 2011



India's economy continues to grow. Sony's electronics sales are growing faster than the country's electronics market. In fiscal year 2010 (the year ended March 31, 2011), Sony's market share increased in a number of high-growth product categories.

Despite a slight slowdown in growth during the recent global recession, India's electronics market picked up speed again in 2010. Sony's sales in the period grew faster than the market. BRAVIA™ captured the top share of the market for LCD televisions, a high-growth product category, in terms of value, while Cyber-shot™ was number one in the digital camera market in both value and volume sold and VAIO® PCs rose to number three in the PC market in value terms.* The expansion of our shares in such key markets is attributable to our operations in India, which we have worked to strengthen, as well as to our effective channel strategy.

*
LCD television market share estimated by GfK Marketing Services Japan Ltd. based on data for January 2010through February 2011. Digital camera market share estimated by Sony based on data for April 2010 through February 2011. PC market share estimated by International Data Corporation Japan based on data for the first quarter of fiscal year 2010, ended March 31, 2011, to the third quarter of fiscal year 2010.


Building on operational strengths in an assertive bid to attract middle-income consumers

  • Building on operational strengths in an assertive bid to attract middle-income consumers

As India is geographically large, it is critical to operate in the most suitable way that fits each city and region. Sony classifies the Indian market into three categories, ranging from small cities to large metropolitan areas. Our 19 sales branches cover a total of 450 cities. To ensure our customers can use Sony products without concern, we have also developed a network of 250 service centers across the country. As transport can be difficult due to the state of many roads and taxes on interstate sales, we have established 30 warehouses nationwide, ensuring our ability to manage our supply chain effectively. Building on this robust operational structure, we are accelerating efforts to expand our marketing activities beyond our traditional customer base -- India's 40 million affluent citizens -- in an assertive bid to attract consumers in the country's middle class, which is expected to see further growth in the years ahead.

Cricket in India and Sony

  • Cricket in India and Sony
  • Cricket in India and Sony
    ©2011 Board of Control for cricket in India/IPL. All Rights Reserved.

Cricket is by far the most popular sport in India. In advance of the ICC Cricket World Cup 2011, which was staged in India in March 2011, Sony launched a major advertising campaign for BRAVIA LCD televisions featuring India's national team captain, Mahendra Singh Dhoni, as Sony Brand Ambassador. The highly effective multi-media campaign, which coincided with the Cricket World Cup, included approximately 3,000 television spots and more than 150 outdoor billboards, as well as in-store promotional campaigns.
India won the title match of the 2011 tournament, much to the delight of the Indian people. Sony will continue to promote appealing, memorable marketing and advertising efforts in India.

Enhancing Sony's respected brand strength through a carefully tailored channel strategy

  • Enhancing Sonyfs respected brand strength through a carefully tailored channel strategy


  • Sony Center
  • Sony Center

As with its operational structure, Sony recognized the importance of having an effective channel strategy that takes into account regional differences. In addition to national chain stores that cover many areas in India, we have regional chain stores in specific areas, and both types of stores continue to see sales growth. In India, there is not a single chain store network of identical stores in every city and town in the country; rather, store configurations differ from region to region. For this reason, we are seeking to increase the number of contracted subdealers we work with. To enable us to communicate the Sony brand message to consumers directly, we have established a network of approximately 270 Sony Center and other branded shops nationwide. Branded shops sell not only electronics products, but also PlayStation® products and Sony Ericsson mobile phones, among other products. Branded shops thus contribute to an enhanced brand image, as well as to greater recognition of the Sony name.

  • Masaru Tamagawa, Managing Director
    Masaru Tamagawa
    Managing Director, Sony India Pvt. Ltd.

In fiscal year 2010, ended March 31, 2011, with efforts to bolster day-to-day store sales and tighten inventory control, together with effective advertising and promotional activities, we succeeded in increasing our market share in several growing product categories and, as a result, in expanding the scale of our business. As managing director, I place a high priority on frequent communication with staff at all levels -- to ensure we all share the same goals and acknowledge the same issues -- and on customer research. We visit many residents and we are always eager to better understand people's tastes and discover what has direct relevance to their lives. The hit BRAVIA NX Series of LCD televisions, developed exclusively for the Indian market, came about in part as a result of efforts such as this. The use of India's national cricket team captain as brand ambassador in advertisements and promotions was also aimed at encouraging a feeling of familiarity with Sony.

Going forward, I believe strongly that the key to expanding our business and growing the Sony brand in India will be to secure talented employees. Fostering human resources and assertively localizing staff will be equally as important as enhancing our operational strengths. With the Indian market expected to continue growing, I look forward to pursuing a variety of initiatives with the aim of increasing Sony's presence.

  • human resources and assertively localizing staff


Sony Pictures Entertainment's television operations in India

  • Sony Pictures Entertainment's television operations in India
    ©MSM Satellite (Singapore) Pte. Ltd. All Rights Reserved.

India has one of the largest and most dynamic television audiences in the world reaching more than 124 million households in the country and generating nearly U.S. $6 billion in revenue a year. Indian television has boomed since 2004 with yearly double-digit growth in distribution, content and advertising.*

Sony Pictures Entertainment entered the Indian television market in 1995 with the launch of Sony Entertainment Television (SET). The general entertainment Hindi-language channel quickly became a success and has remained one of the top-rated channels for more than 15 years with hit shows like Who Wants to Be a Millionaire (Kaun Banega Crorepati) and Indian Idol.

The company added to its portfolio of channel brands with the launch of AXN (1998), SET MAX (MAX) (1999), Animax (2004), SAB (2005) and SET PIX (2006). All of Sony Pictures' channels in India are owned, operated or distributed through a joint venture, Multi Screen Media Private Limited (MSM).

As the official home in India for the Indian Premier League's (IPL) renowned Twenty20 cricket competition, MAX typically rates in the top five of the country's channels. At the start of the IPL's fourth season in April 2011, over 154 million viewers tuned in to MAX.

AXN is a leading English-language general entertainment channel commanding a more than 50% share of this audience across all demographics as compared to its competitors in this category.

*
"Indian Entertainment and Media Outlook 2009," PricewaterhouseCoopers, June 29, 2010.


Contributing to the further evolution of India's entertainment industry through the newly established Media Technology Centre

To encourage the proliferation of HD and 3D film production, in March 2011 Sony inaugurated Sony Media Technology Centre in Mumbai, India -- which joins similar facilities established in the United States and the United Kingdom -- at the Mumbai campus of film school Whistling Woods International. Within the Centre, Sony has installed cutting-edge Sony equipment to create content, such as video cameras and equipment for editing, for use in training in the areas of digital HD movie production and 3D content creation not only for the school's aspiring filmmakers, but also for industry professionals. By extending advanced technologies and products, as well as its training expertise, Sony hopes to contribute to the further growth and development of India's entertainment industry.
  • Yukio Takeyari, Centre Head
    Yukio Takeyari
    Centre Head, Sony India Software Centre

Sony currently has global software development facilities in the United States, Europe and Japan. In emerging countries, we have those facilities in China and India. Among these, Sony India Software Centre (SISC), located in Bangalore -- India's Silicon Valley -- has expanded notably in recent years. Established in 1997, SISC serves as a development base for software used in a wide range of products manufactured by Sony Group companies around the world and as the Group's global offshore IT centre.

With the role of software taking on ever-greater importance in this digitized age, SISC is rapidly augmenting its team of engineers. In fiscal year 2010, ended March 31, 2011, we had approximately 1,000 engineers on staff. With an eye to further personnel expansion, in January 2010 we moved to a new SEZ (Special Economic Zone) in Vrindavan Tech Village.

In fiscal year 2010, ended March 31, 2011, our work contributed to efforts of the entire Sony Group to advance state-of-the-art 3D technologies, as well as to the development of new products, including Sony Internet TV, Sony Tablet and Android™*-based mobile phones and other devices. As the Group's strategic offshore IT centre, we worked together with Group companies with the aim of reinforcing the Group's operating foundation. Looking ahead, we will step up our efforts to foster human resources and actively seek to expand relations with other software engineers around the world. Having an R&D base in the burgeoning Indian market will most certainly be a major advantage for the Sony Group.

*
"Android" is a trademark of Google Inc.


  • Sony India Software Centre (SISC)





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