Japanese electronics major Sony looks to significantly grow its audio business in India with a sub-brand ULT. It expects the audio business to contribute 30 percent to the overall revenue in 2024 up from 20 percent last fiscal, besides raising its value market share in the audio segment, Sunil Nayyar, managing director of Sony India told Moneycontrol.
The company also plans to drive premiumisation in its TV business in 2024 by focusing on 43-inch and above screen-size products.
“We have had sub-brands before for the TV and camera business. With ULT, we wanted to create a distinct identity for audio products. Last year, audio contributed 20 percent towards our overall business. We have a target to grow it to 30 percent this year,” Nayyar said.
The ULT brand, which targets GenZ and millennials, has headphones, portable speakers and other outdoor wireless speakers. The executive said the brand will evolve further, with more audio products across categories. “All products are designed for India.”
The executive noted that the audio market is only getting competitive in the True wireless stereo space, which domestic brands currently dominate with their affordable products in the sub-Rs 3,000 category.
“TWS is a very price-competitive and cut-throat market but we play in the Rs 5,000 and above segment. Our battlefield is small in this category but growing,” he said.
The executive said Sony will continue to focus on the value market share, adding it has the “best” average selling price (ASP) in the market due to its premium approach.
Focus for smart TV and gaming
“We are in sync with how the market is growing. We are leaders in the 55-inch and above segment but we are going to play in the 43-inch segment which is a big pie,” he said. The company will also focus on the AI-TV or Artificial Intelligence-enabled smart TV segment.
Nayyar, however, said that the smart TV market in India will only grow in low-single digits due to falling sales of 32-inch TVs.
India’s smart TV shipments declined 16 percent year-over-year in 2023 due to a slow start in the first half of the year, macroeconomic challenges, and excess inventory, according to Counterpoint data, which estimates the market to grow 9 percent in 2024.
The executive also said that the company is absorbing the open cell price increase and not passing it on to consumers. “It is a sinusoidal wave… Prices go up and down based on demand. We average it out… We absorb the price increase because we can’t give the burden to the consumer.”
The open cell price increase started in 2022 and has continued since then, driving up average TV prices, which analysts said could dent demand. Nayyar said that volatility in the open cell pricing has gone down since last year.
Open cells are one of the main components in television sets and account for 60-65 percent of the manufacturing cost.
Television contributes more than half of Sony's overall revenues, with audio and cameras each accounting for 20 percent. The remainder comes from gaming (PlayStation) and professional solutions for enterprises. “Total business of Sony India will also see growth this year.”
The company also tripled its PlayStation or gaming business last year on the back of the PS5 and expects to further drive growth in 2024 on the back of a fast-growing gamer consumer base. “We expect it to account for 10 percent of overall revenues in the coming time."
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