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Sony banks on India for optical drives

Source : BUSINESS_STANDARD
Last Updated: Mon, Nov 26, 2012 19:40 hrs

Every time you watch a Hollywood blockbuster on a Sony blue-ray disc player or take on competition on a Sony PlayStation, chances are the optical drive powering your Sony device is made in India. The Japanese electronics behemoth, which sold 8.4 million personal computers and notebooks, seven million blue-ray disc players and 18 million PlayStations last year, now sources about 60 per cent of its global optical drive requirements from India.

What triggered the huge dependence? The Fukushima disaster that followed the earthquake and tsunami in Japan in March 2011, as well as the floods in Thailand, severely hit Sony’s traditional procurement model for optical drives. To diversify its supply base, Sony, which has been producing optical drives at its own factory in Oski, Japan, since April 2006 through its subsidiary Sony Optiarc, shipped the business to India.

“Now, about 60 per cent of our optical drives are sourced from India,” said Kenichiro Hibi, managing director of Sony India. He added the advantage of low costs and high quality had allowed the company to gradually enhance sourcing of optical drives from India in the past few months. “It took almost six months to streamline the production and the supply chain,” he said. Though earlier, too, Sony sourced optical drives from Indian vendors, it was on a lower scale.

In August, Sony had announced it wouldn’t manufacture optical drives and shut Sony Optiarc, which had a share of about 15 per cent in the global optical drives market; operations would be wound up by March 2013. This could lead to a rising company’s dependence on India. Sony India, however, didn’t comment on this directly. “We would continue sourcing optical drives from India,” said Hibi.

This presents an opportunity for Indian optical drive manufacturers. According to a report by market intelligence firm iHS iSuppli, global shipments of optical disk drives are expected at 299.8 million units this year, against 297.7 million units last year.

Sony declined to disclose the names of the companies that made optical drives for it in India. Earlier, before it started producing its own optical drives through Optiarc, Taiwan-based Liteon made optical drives for Sony. Liteon also has a unit in India.




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