I. Strengthening Core Areas

Sony has positioned its digital imaging, game and mobile businesses as the three main pillars of its electronics business and will focus investments in these areas going forward. Sony anticipates that approximately 70% of its total R&D budget will be dedicated to these areas. By growing these three businesses, Sony aims to generate approximately 70% of total sales and 85% of operating income for the entire electronics business from these categories by the fiscal year ending March 31, 2015 (fiscal year 2014).

Core Business: 1.Digital Imaging

Digital Imaging*

In digital imaging, Sony will further strengthen the development of proprietary technology in image sensors, signal processing technology, lenses and other fields in which it excels. Particularly in image sensors, Sony has consistently invested resources in this strategically important area and will continue to do so as it strives to reinforce technical differentiation and bolster sales in such high-growth areas as smartphones. Furthermore, by leveraging these unique technologies in consumer products as well as a broad range of professional products, including security, professional-use camera and medical equipment, Sony aims to further expand the scope of the digital imaging business and create attractive and differentiated products.

Sony believes that it can maintain its high market share in the digital camera and digital video camera markets and generate stable profits in these categories. Meanwhile, the market for interchangeable lens digital cameras is expanding, and Sony´s goal is to leverage its unique technologies as it targets sales growth exceeding the market growth rate to build profitability.

Core Business: 2.Game

Game*

In the game business, with the rise of casual and social games on smartphones and PCs, many developments are taking place affecting business models and the ways in which users enjoy games. Sony will continue to closely monitor the market and identify consumer needs, as it remains committed to offering immersive entertainment experiences to its customers.

Sony intends to generate steady profits across three hardware platforms, which provide users with exhilarating entertainment experiences. They comprise PlayStation®3, PlayStation®Vita-launched in late 2011-and PSP® (PlayStation®Portable), which continues to enjoy momentum in emerging markets. Sony is also bolstering its growing network services business, and plans to increase sales of downloadable game titles and subscription services. In addition, Sony plans to reach new customers in the smartphone and portable devices markets by expanding the lineup of PlayStation®-certified devices as well as the choice of content available, thereby enhancing profitability.

Core Business: 3.Mobile

Mobile*

By strengthening the smartphone business-bolstered by the 100% consolidation of Sony Ericsson (now Sony Mobile Communications AB)-Sony will further accelerate integration of Xperia smartphones, Sony Tablet and VAIO PCs and increase product appeal. Sony will realize a one-platform operating structure for its mobile business and expects these changes to improve efficiency in production and sales and enable more effective allocation of personnel, thereby realizing cost reductions.

Sony provides movie, music and game content to customers worldwide via online networks. Consumer electronics products must become ever-more network-compatible to maximize the enjoyment and convenience of such content.

In this respect, the smartphone is truly the hub of the networked entertainment world. As mobile connection speeds increase and cloud computing becomes commonplace, the potential opens up for the development of a diverse array of new business models. In February 2012, Sony Mobile Communications AB became a wholly owned subsidiary of Sony. By combining the business know-how cultivated to date in the communications technology sphere with Sony´s substantial assets and proprietary technology in the digital imaging and game fields, the Sony Group will aim to expand market share driven by the launch of innovative mobile products.

*The headings in this section do not indicate Sony´s business segments. Sony is currently modifying its business segment classification to reflect its reorganization as of April 1, 2012. Sony expects to report its operating results in line with new business segments from the first quarter of the fiscal year ending March 31, 2013.

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