Sony Focuses Supply Chain on 250 Partners to Speed Production

Sony Corp. (6758), the maker of Xperia smartphones and PlayStation consoles, will focus its supply chain on 250 strategic partners as it seeks to lower costs and accelerate production.

The strategic partnership isn’t permanent and is designed to make its products more competitive, Tokyo-based Sony said in an e-mailed statement. The company is choosing partners for key products, including smartphones and digital cameras, from about 1,000 current suppliers, spokesman Koji Kurata said today.

Chief Executive Office Kazuo Hirai, who last month forecast a $1.1 billion loss, is trying to cut costs to spur a revival at a company hit by declining demand for televisions, cameras and personal computers. Sony is struggling to find new hit products to capture a consumer shift to mobile devices from Apple Inc. and Samsung Electronics Co.

“It will be helpful for cutting costs and achieving shorter research and development periods, which are crucial for smartphones,” said Keita Wakabayashi, an analyst at Mito Securities Co. in Tokyo.

Shares of Sony rose 0.6 percent to 1,741 yen as of 12:52 p.m. in Tokyo, where the stock is down 4.5 percent this year.

The company didn’t identify which companies are being classified as strategic partners.

Sony’s existing suppliers include Hon Hai Precision Industry Co., Samsung, Wistron Corp., Pegatron Corp. and LG Display Co., according to data compiled by Bloomberg.

Entertainment Cuts

In November, Sony announced plans to cut $250 million in costs at its entertainment units over two years as part of Hirai’s plan to boost profit and keep full ownership of the movie, TV and music businesses.

Sony Pictures Entertainment is eliminating about 216 positions at its Culver City, California, headquarters, according to a letter to state regulators obtained by Bloomberg News. Cuts are also taking place at other locations worldwide, a person familiar with the matter said, asking not to be named because the details aren’t yet public.

Sony Corp. last month forecast a $1.1 billion loss and said it will cut 5,000 more jobs as Hirai expanded his reorganization after failing to meet a pledge to end TV losses this year.

To contact the reporter on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Robert Fenner

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