With good news coming from PlayStation, Sony CEO, Kaz Hirai has been talking with reporters about the company’s future. Despite a disastrous 2013 fiscal year ending in March where Sony reported a loss of ¥130bn / $1.27bn / €929m, Kaz believes that the company will return to profitability come 2015. Kaz also sees Sony achieving this with no more job cuts or division closures, a good sign that the company is seeing results from their past action. So how else is Sony hoping to get profitable? By focusing on profitability and not market share.

Wait what? Yea, us too. Let’s talk, after the jump.

According to Kaz Hirai, Sony will stop aiming for market share and instead focus on profitability. What he means by this is that Sony isn’t interested in releasing low margin products only to gain market share. Amazon famously does this with the Kindle eReaders and Kindle Fire tablets (though they barely constitute as a real tablet). Instead, Amazon floods the market with razor thin margins, if not losses on each device sold in hopes that people will turn to their other services where the company makes money. On the other end of that business model is Apple where they make all of their money from hardware. Apple famously enjoys a 30-40% profit margin on each device sold.

While the statement from Kaz makes for a great headline, the root of it is a bit more baffling. If there has been one problem that Sony has faced this past decade, barring PlayStation for the equation, it’s that they have very little market share in all most all of the sectors they operate in. Many years ago when we wrote about how Sony should pack its bags and exit the eReader business (which they finally did this year), the company wrote us back and insisted that they were interested in making quality products and weren’t interested in chasing market share.

This mentality can be seen in the company’s TV division which is far behind rival Samsung and LG in sales. Same goes true for digital imaging where Canon and Nikon lead in sales though at least that division is decently healthy. Mobile is another example where Sony managed to sell 39 million Xperia smartphones in 2013. While an increase for the company and a good sign, Apple sold over 9 million iPhone 5S and 5C units in the first weekend. On the other hand, Sony has many more smartphone models than Apple which should cater to a great demographic than that of Apple. To further put things into context, Apple sold 33.8 million iPhone in the last quarter alone. This isn’t mean to beat on Sony and  it’a worth noting that Apple is an anomaly of a company that operates completely different than its rivals.

Still, there is one major caveat we have with what Kaz is saying. Hasn’t Sony been trying this business for the past decade with little to see for it? Is Sony looking to rely less on their already small market share and instead continue to target the mythical “high end” consumers that Apple draws? If so, this can be a worrisome trend as its seemed the company has already been doing this. While I don’t believe Sony should lose sight of the high-end consumers, the real growth for Sony likely lies with everyday consumers. With an extensive and competitive lineup already, Sony should worry less on which consumers they’re targeting and instead tell consumers that their products actually exist.

Maybe we’re reading too much into this and the statement from Kaz was just that; a statement to the press and more importantly investors that the company is focused on delivering profits and not just releasing products for the sake of them. Because if there is one thing Sony needs, it’s more exposure to consumers and not less. Pioneer tried that too in televisions and it didn’t work for them either.

Discuss:

What do you think Kaz meant by his statement?

[Via JapanToday]