When we talk about brands like Samsung, LG or Sony, we instantly assume that they are related to electronics and smartphones. But what we forget is the fact that most of these South Korean and Japanese giants are actually conglomerates or companies that consists of a number of distinct divisions or businesses.
Take Samsung for example. Most of us only know that the South Korean giant makes TVs, refrigerators, air conditioners, and smartphones, but not many of us know that the company has also other interests in other sectors such as construction, shipping and banking. In fact, the Burj Khalifa, the world's tallest tower in Dubai, was actually made by Samsung.
Sony is merging it's three businesses into one
However there are times when these conglomerates need to merge all or some of their divisions into one "umbrella company" and that's what Japan's Sony is reportedly going to do. The Japanese electronics giant has announced that it will be re-organizing three of its biggest electronics divisions to establish a new intermediate entity that will take care of some of its biggest product portfolios.
Sony will reportedly incorporate Sony Mobile Communication, Imaging Products & Solutions, and Sony Home Entertainment & Sound into a new holding company called Sony Electronics Corporation which will come into effect starting April 1. This means Sony's Xperia phone business, consumer camera segment and its TV and home audio systems, which currently function as separate entities, will be combined under one brand.
Sony aims to become more competitive
Sony released a press release announcing its decision, saying that with the establishment of Sony Electronics Corporation, it aims to not only better integrate the different EP&S (Electronics Products and Solutions) businesses, but also optimize its organizational structure, talent and business portfolio, while also becoming more competitive overall and creating new business.
Along with this, all the relevant global sales and marketing, manufacturing, logistics, procurement and engineering efforts for the three divisions will also get aligned under the new entity.
Sony believes that the new streamlined structure will help make its ecosystem of consumer products more cohesive and having a common leadership should ensure the different teams follow the same strategy. The single entity also ensure a free flow of data, know-how and experience between departments.
Lucrative PlayStation business remains independent
The incorporation leaves just Sony Interactive Entertainment, which produces the PlayStation gaming consoles and its games, the only independent consumer-facing electronics division of the Japanese electronics giant. And it doesn't come as a surprise since SIE has been doing quite well in terms of profits.
Although Sony's consumer camera division becomes a part of the Sony Electronics Corporation, its image sensor division and professional equipment division which makes cameras for studios and broadcast equipment, will remain independent. Sony's other non-electronics businesses which include Sony Music, Sony Pictures (films), and its medical and financial services will also remain unchanged.
Move will benefit Sony's struggling phone business
The company's move to consolidate could prove beneficial for Sony's struggling smartphone business. Though the company has been making some of the best camera sensors for smartphones it has been struggling to keep its own 'Xperia' smartphones relevant in the market, and this is mainly due to their camera performance not being on par with that of some of the flagships, many if which use the same camera hardware.
Apparently, until now Sony's mobile division has been getting the same treatment from Sony's imaging division as any other outside client, but the merger should see Sony's smartphone team getting access to the company's upcoming sensor earlier which could prove to be a competitive advantage. This will give Sony's mobile division a head start to develop the camera software to work more efficiently with the hardware by the time of release. The move will also help Sony reduce some expenses by getting rid of redundant staff.
Hopefully, the new changes help Sony get back to its glory days, and we hope to see some really exciting phones from Sony in the future. Meanwhile, Sony also said that it has appointed Shigeki Ishizuka as the CEO and President of the newly formed Sony Electronics Corporation. He will also head Sony's Storage Media Business as well.