Sony's new alliance with scandal-tarnished Olympus will focus on
producing endoscopes and other surgical tools packed with the Japanese
electronic maker's three-dimensional imaging and super clear "4K"
Sony Corp. President Kazuo Hirai said it's not
clear when the alliance's first products will become available. He
acknowledged that medical equipment requires special regulatory approval
that will take longer and be a learning curve for Sony whose expertise
is in gadgets and movies.
"This is a challenge in a new sector,"
Hirai told reporters at the Tokyo Chamber of Commerce in a joint press
conference with Olympus Corp. President Hiroyuki Sasa. "There was a lot
of talk on whether we could go at it alone."
But Sony decided it
couldn't and felt that risks could be lowered if the two Japanese
companies joined forces in the effort to turn medical equipment into one
of the pillars of Sony's sprawling business, Hirai said.
empire includes consumer electronics, movies, music, games and banking.
The company's sheer size and its apparent inability to produce long
promised "synergies" among its divisions have often been criticized.
such as 3D and the futuristic displays known as 4K have not yet
produced big results in consumer electronics products such as TVs. TV
sets with 3D images require viewers to wear special glasses and haven't
caught on. Sony has shown a 4K TV image, which is more fine and dazzling
than high-definition TV, but it is unclear whether such an expensive
product will catch on.
The alliance, announced Friday, calls for
Sony to invest 50 billion yen ($640 million) to become the top
shareholder in Olympus, with an 11 percent stake.
Olympus needs to
shore up its finances after covering up massive losses dating back to
the 1990s. The scandal surfaced only after its British chief executive
Michael Woodford turned whistleblower and raised questions about dubious
investments. Woodford was later fired.
Hirai said Sony is aiming
to control more than 20 percent of the medical-equipment-for-surgery
market by 2020, when the sector is expected to grow to 330 billion yen
The companies are planning also to cooperate in the
digital camera area, where they have been rivals. Sasa said cost savings
would be likely by sharing parts.
Of Sony's 50 billion yen ($640
million) investment, about half will go into developing endoscopes
equipped with 3D and 4K technology, Sasa said.
Olympus is the
world's biggest maker of endoscopes, which are special devices that
enter the body to look inside organs and can be used to carry out
surgery. Olympus is also known for its cameras.
Sony needs a
turnaround after reporting losses for four straight years as it fell
behind in portable music players, flat-panel TVs and smartphones. Sony's
red ink for the latest fiscal year through March was the worst in its
A report Friday by Barclays in Tokyo said the
deal was a big plus for Olympus but not much of a boost for Sony,
although it said that using Sony's sensor and digital image technology
in the medical sector held great promise.
Sony stock inched down 0.2 percent on Monday. Olympus gained 1.3 percent.
and its three former executives pleaded guilty in a Tokyo court last
week on charges of falsifying financial reports, involving elaborate
schemes using overseas bank accounts, paper companies and transactions
controlled behind the-scenes all to keep massive losses off company