Sony Press Release

Sony Group Mid-Term Corporate Strategy FY2005-FY2007 - Strengthening Group Performance through Revitalization of Electronics

Tokyo, Japan, September 22, 2005 – Sony today announced significant moves to strengthen its competitiveness by focusing on its three core sectors: electronics, games and entertainment. In particular, the company is concentrating on the revitalization of its electronics business through further structural reforms and promotion of a well-defined growth strategy. Our target is for the Sony Group to achieve consolidated sales of over 8 trillion yen and an operating profit margin of 5% (electronics 4%) by the end of fiscal year 2007. (*1)

As a key part of this initiative, we are significantly reorganizing our electronics group to place centralized decision-making authority over key areas under the Electronics CEO. This substantial change abolishes the company system and assures coordination and focus across newly defined business groups. Rigorous horizontal coordination in key areas – product planning, technology, procurement, manufacturing, and sales & marketing – will allow rapid and streamlined decision making across product lines. This will also permit uniform software development that will assure seamless interoperability between our products, eliminate design and product redundancies, and assure decisive and rational R&D planning and spending.

In addition, our structural reforms are expected to achieve a 200 billion yen reduction in costs by the end of fiscal year 2007. This will include rationalizing unprofitable businesses, reducing the number of product models, and consolidating manufacturing sites, leading to a reduction of 10,000 in the global group headcount. We will also review our real estate, stock holdings and certain non-core assets with a view to making disposals amounting to 120 billion yen by the end of fiscal year 2007. Reports on the progress of our structural reforms will be given quarterly.

For our growth strategy in electronics, resources will be focused on HD products, mobile products and the semiconductors/key component devices that can further differentiate Sony’s products from the competition. A division to promote the development of Cell processor-related technology, products and applications will be created reporting directly to Sony’s CEO.

In addition to our strengthened electronics business, we will leverage all our resources including motion pictures, music, games and our brand recognition to deliver more appealing products and services as the world’s leading electronics and entertainment company.

(*1 before restructuring and one time charges)