Sony embraces robotics to cut costs and boost digital services

Sony is predicting that robots will take over its manufacturing lines of televisions, smartphones and cameras as the entertainment conglomerate shifts its attention to services to drive sales of consumer electronics devices.

Kimio Maki, head of Sony’s electronics businesses, said the acceleration of factory automation would be combined with a greater focus on online sales and data analysis to slash manufacturing costs. He added that it would also help reduce product defects.

“I don’t think automation alone using robots will bring enough merits. The key is to use digitalisation to link both sales and manufacturing,” Maki said in an interview with the Financial Times.

He said that installing unmanned production lines was expected to cut costs 70 per cent at Sony’s mainstay TV factory in Malaysia by the fiscal year 2023, compared with 2018. The group also has ambitions of using robotics in smartphone and camera manufacturing in the future, although it will maintain some factory workers.

On the marketing front, sales data will be analysed using artificial intelligence to more effectively set manufacturing volume.

The digitalisation push for cost efficiency comes as Sony’s strategy in consumer electronics has pivoted. The group has stemmed TV losses that spanned more than a decade and steadied its financial performance by shifting to smaller volume but higher-end products. 

Far from simply selling hardware such as Bravia TVs and Xperia smartphones, Maki is tasked with offering compelling services that will keep consumers interested and coming back, generating recurring revenue. 

While Maki said the company would continue selling hardware and services to consumers, a meaningful part of its growth target would come from products for professional use, such as crystal LED displays for virtual video production and ball tracking technology for the sports entertainment industry. In the long term, Sony also wants to target the entertainment space for cars.

The shift has also improved the profitability of Sony’s electronics and medical businesses, with their operating profit margin rising to 7.2 per cent in the fiscal year that ended in March compared with 3.3 per cent in fiscal 2018. Maki has told investors that he wanted to lift that figure to 10 per cent.

Critics have long pointed to Sony’s weakness in services and digital platforms as a big reason why the Walkman maker lost the battles against Apple’s iPod and Amazon’s Kindle, despite holding a rich entertainment portfolio that spans games, music, films and animation. 

Another challenge has been Sony’s hierarchical and siloed structure, which has made it difficult for divisions of the conglomerate to co-operate on an ecosystem that integrates various products. 

But that was changing, Maki argued, since Sony spun off its electronics businesses into a separate subsidiary and merged audio, TV, mobile phones, cameras and medical businesses into a single organisation in April. 

“By being brought together under a single entity and governance structure, we are now able to co-operate organically to create something new. That applies not only to making products but also to purchasing, manufacturing, product development and sales,” he said.