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Sony CEO: Electronics Sales Still Strong

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YURI KAGEYAMA | December 11, 2007 03:50 PM EST | AP

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TOKYO — Despite a "dodgy" U.S. economy, holiday sales of electronics remain strong, Sony Corp.'s top executive said Tuesday as he reiterated the company's fiscal targets.

"It's a shaky economy in the U.S., but it hasn't affected electronics," Chief Executive Howard Stringer told reporters at Sony's Tokyo headquarters.

Sony, which is in the final stretch of a three-year-turnaround plan that Stringer engineered, is on track to achieve an operating profit margin of 5 percent for the fiscal year that ends in March next year, he said.

Investors have been worried that a slowdown in the U.S. economy would hurt Sony's efforts because the electronics and entertainment company gets almost a quarter of its revenues in the U.S., but Stringer tried to allay those concerns.

Boosted by price cuts and a shortage of the rival Wii console from Nintendo Co., sales of the PlayStation 3 video game console have improved after a fitful start last year: since Black Friday, Sony has been selling more than 200,000 PS3 units a week in the U.S. and Europe, Stringer said. In Japan, the rate is about 40,000 to 50,000 units a week.

In LCD televisions, Sony leads in market share in the U.S. and China, he said. Also, Sony's Cyber-shot digital camera phone and Walkman phones are all continuing to sell "extremely well," he said.

When Stringer took the helm at Sony in 2005, the company _ once a symbol of innovation with its Walkman line of personal stereos _ had been stumbling, falling behind in flat-panel TVs and digital music players. Stringer's recovery strategy included massive job cuts, plant closures and dropping unprofitable businesses.

The company sold off part of its stake in its financial unit, and sold to Toshiba Corp. its advanced computer chip operations for making the PlayStation 3's "Cell" microprocessor.

Now, Sony is preparing for a growth plan after the restructuring efforts are completed next year. Key products include flat-panel TVs, a music player with robotics technology and networking services for the PS3, Stringer said.

They "bring back some of the wow factor" and show Sony has recovered from its past financial problems, he said, adding that "the next cycle is actual innovation."

Sony's network service, now used to pipe video games to the PlayStation 3, will be expanded to offer other kinds of content. He did not give details or a timetable.

Besides its core electronics business, Sony owns the Hollywood movie studio that made the "Spider-Man" series. Sony also has a joint venture in music with Bertelsmann AG that has Bruce Springsteen, Justin Timberlake and Beyonce Knowles under its labels.

Such entertainment content will likely be offered as downloads for the PlayStation 3 in Sony's effort to catch up with U.S. companies like Apple Inc. and Microsoft Corp.

Stringer said he planned to stay on as chief executive and steer the next three-year plan. But, he continued, "Am I going to be here for the next 10 years? Probably not."


Associated Press Technology Writer May Wong contributed to this story from San Jose, Calif.