Sony Seen Restored Using Chips in Market Fighting Disease (Tokyo)

TOKYO — Rising rates of cancer, obesity and heart disease may offer a path back to health for Sony as the ailing Japanese maker of televisions, cameras and game consoles turns to semiconductors to end unprecedented losses.

Japan's largest consumer-electronics exporter will speed up a move into health equipment by using the edge its new image-sensors have over rivals, incoming Chief Executive Officer Kazuo Hirai said. The medical field could become a main profit source, Hirai said, as Sony cuts targets on PlayStation 3 units, Blu-ray disc players and Vaio computers.

"We can leverage our technology base in image-capturing sensors, lenses, 3-D technology, image processing, to mention just a few areas," Hirai said Thursday. "Those are areas where we already have in-house technologies that really allow us to differentiate ourselves."

Sony won a boost after its smaller and more efficient CMOS chips were used in Apple 's iPhone 4S. It's now targeting endoscopes used to look inside body cavities and other applications. Medical devices mark a further retreat from consumer products, where Sony has struggled against cheaper South Korean and Chinese rivals and Apple's hit releases.

"They are looking for new markets that can support their strengths in making high-quality goods," said Nobuo Kurahashi, an analyst at Mizuho Financial Group. "Medical comes to mind," he said. "It's a market where people are prepared to pay for quality."

Sales of audio-visual goods such as Trinitron televisions and Walkman music players accounted for 89 percent of Sony's 1.05 trillion yen ($13.6 billion) revenue in 1981. Thirty years later, the share from consumer products has fallen to 52 percent.

Sony is committed to the TV division, which by the end of March will have lost about 700 billion yen over eight years, Hirai said, but it will cut the range of sets. Sony will also review more than 2,000 consumer products it makes, and may exit unprofitable businesses. Announcing third-quarter earnings on Feb. 2, Sony forecast a 220 billion yen loss in the year ending March 31, the longest line of red ink since it went public in 1958.

Hirai takes over in April from Howard Stringer, who spent seven years restructuring the company, trying to marry Sony's engineering capabilities to gaming software, music and film content. But Cupertino, Calif.-based Apple did a better job of delivering the integration of design and software across a platform of products, and Suwon, South Korea-based Samsung Electronics undercut Japanese manufacturers on cost.