September 30, 2005 – As part of its group reorganization, Sony Corp. plans to bolster the development of common core semiconductors and software for various portable devices to enhance competitiveness in its digital home electronics business, The Nihon Keizai Shimbun learned Thursday. The mobile electronics development segment, which will report directly to Sony President Ryoji Chubachi, plans to make the common semiconductors and other components ready for use by 2006, according to sources.

The electronics and entertainment giant announced the details Thursday of the new structure for its electronics segment, which currently is divided into six so-called network companies, such as home electronics and personal audiovisual equipment. On Saturday, the segment will be reorganized into five divisions and two business groups.

In 1994, Sony was one of the first in the industry to introduce an in-house company system — an organizational structure in which each company is highly autonomous in budget management and other areas. It is abolishing this system because the negative aspects of vertically divided segments have become apparent and because the firm has become unable to keep up with the digital home electronics era, according to Chairman and Chief Executive Officer Howard Stringer.

By eliminating the post of each network company’s president, who has decision-making authority on large investment projects, greater power will rest on the shoulders of Chubachi, who also heads the electronics segment. Through this move, Sony hopes to be able to speed up new product releases by fully tapping the electronics segment’s various hardware and software technologies.

Sony also said that it will create a Cell development center to discuss how the powerful Cell microprocessor, to be used in the group’s next-generation game console, can be applied in home electronics. This center will report directly to Stringer because its activities will span various segments, including games.