Sony's TV operations lost 77 billion yen ($667.6 million) on operating basis in the April-September first half on sliding sales of cathode ray tube (CRT) models and intense price competition in the fast-growing flat-TV market with rivals such as Sharp Corp.
But Sony Senior Vice President Takao Yuhara told reporters that its TV division was showing signs of improvement as its new line-up of Bravia brand liquid crystal display (LCD) TVs had sold well in the United States, Europe and Japan.
He said Sony would also benefit from a steady supply of LCD panels from S-LCD, its $2 billion LCD joint venture with South Korea's Samsung Electronics Co Ltd that started shipments in April and hit full capacity this month.
"We expect these factors to start contributing to an improvement in profitability from the second half," Yuhara said, reiterating the company's target to return the TV division to profit in the second half of 2006.
Yuhara's comments come one day after Sony posted a 52 percent rise in operating profit for the July-September second quarter as a big pension gain offset red ink in its movie division and losses on TVs, audio equipment and semiconductors. The chip division lost 20 billion yen in the quarter due to sliding prices of charge coupled devices (CCD), start-up costs for a chip plant, and development costs for its "Cell" microprocessor developed with Toshiba Corp and IBM
Yuhara said semiconductors would lose money in the current business year, but stressed that the division played a key role within the group because it supplied chips for a wide range of Sony products including the popular PlayStation 2 game console. To help boost its ailing audio equipment business, Yuhara said Sony had been narrowing its product line-up and taking steps to lower fixed costs. Sony lost 1.2 billion yen on audio devices in the first half as sales tumbled 12.2 percent.
Sony is gearing up to launch a new line-up of advanced portable music players next month, aiming to move out of Apple Computer Inc's shadow in a market that Sony created with the Walkman cassette player a quarter of a century ago.
It has high hopes for the new models, which will add the ability to automatically select and play the songs a user listens to most, and also to pick songs released in a certain year - a function Sony calls the "time machine shuffle".