It is now time for us to start the briefing on the Electronics Products & Solutions segment of Sony Corporation. I will be acting as the moderator today. My name is Hayakawa from IR. This briefing is being held for the analysts and institutional investors whom we have informed in advance. The audio and presentation can be accessed on our website. Today, first of all, we will hear from Shigeki Ishizuka, Vice Chairman, Representative Corporate Executive Officer of Sony Corporation, Officer in charge of Electronics Products & Solutions Business, Representative Director, President, and CEO of Sony Electronics Corporation. He will be discussing the business environment and future direction of business in the EP&S segment, after which time we will have a Q&A session. We expect the program to last about 55 minutes or so. Now we will hear from Ishizuka-san.
Hello, everyone. I am Shigeki Ishizuka. Thank you for attending today's briefing on the Electronics Products & Solutions segment. We established Sony Electronics Corporation on April 1st. While each entity under the new umbrella will continue to operate with autonomy, we will work to make the EP&S segment an even more cohesive unit. We will leverage the strength that comes from the diversity of our resources and businesses. The entire electronics business is devoted to optimizing our organizational structure and human capital, sharing technology, standardizing operations, enhancing the competitiveness of our products, and creating new businesses. Next fiscal year, Sony Electronics will inherit the trade name Sony Corporation. Electronics is where the Sony journey began. I feel the weight of the history and the enormous responsibility that comes from inheriting this name.
Around a half century ago, our founder said, "In challenging times such as these, I believe that meeting the moment head-on with courage is what defines the Sony spirit." We will continue to demonstrate the Sony spirit as we prepare for our start at Sony Corporation next fiscal year. On August 4th, the consolidated results for the Sony Group for the first quarter of the fiscal year ending March 31st, 2021, or FY 2020, were announced. First quarter sales of the EP&S segment decreased 31% compared with the previous fiscal year to JPY 331.8 billion, reflecting a significant impact on all aspects of a supply chain. Despite reducing operating costs across the segment, the decline in sales led to an operating loss of JPY 9.1 billion.
When we showed an estimate of FY 2020 operating income at the May earnings announcement, we presented the estimate as a range significantly below the operating income for the previous fiscal year. This is based on the most pessimistic scenario, including an assumption that sales activities in most regions would come to a standstill. Since then, our supply chain has almost fully recovered, and customer demand is gradually showing signs of recovery, albeit with some variation across product categories and geographies, leading to improvement each month in Sony's sales. As a result, our latest forecast for this fiscal year reflects a stronger recovery than the one assumed in May, and we are quickly stepping on the gas after pressing the brake, thanks to a fully integrated speedy supply chain, one where we have tight control over channel inventory.
We announced that we expect sales to be JPY 1.87 trillion and operating income to be JPY 60 billion. In mobile communications, we recorded an operating income of JPY 11 billion in the first quarter and expect the business to be profitable for the full fiscal year. It is safe to say that the history of the electronics business has been one of constant adaptation to an ever-changing environment, including economic crises, natural disasters, and intense competition. I would like to discuss some of the business transformations that I myself have experienced several times during my career. The compact digital still camera market, which was once highly profitable and fast-growing, suddenly contracted as smartphones proliferated.
In addition to reducing fixed costs in existing businesses such as camcorders and digital still cameras, we made the decision to focus our human and technological resources on our Alpha digital single-lens business starting in 2012. This led to the rapid expansion of our lineup of full-frame mirrorless digital single-lens cameras, an offering our peers lacked. Today, this product category has grown into the driver of our camera business's earnings. Following a 10-year crisis marked by uninterrupted losses, we transformed the television business into one that can consistently generate profit, thanks to the leadership of our current Deputy President, Ichiro Takagi. We achieved this by a large-scale restructuring and enhancements to high value-added products such as 4K, as well as through improvements in every stage of our supply chain, including procurement and cost reduction of key devices, productivity improvements in manufacturing, sales to distributors and retailers, and inventory management.
Despite tough competition from overseas brands, we have now been profitable for six straight years. Our smartphone business has presented challenges, but we brought in a new leadership team in fiscal year 18 that returned to the basics of making products and gave the business a fresh start. We leveraged the collective wisdom of the Sony Group to make our products more attractive. In addition, we undertook major structural reforms, including reducing the number of regions where we sold products, consolidating design and manufacturing facilities, and merging operations with other parts of electronics business. To reduce costs in our smartphone business, we applied knowledge garnered from the experiences I mentioned a moment ago in our TV business. Our task was accomplished in even shorter time than in the TV business.
Our current targets are to reduce operating costs by 64% and overall costs by 72% between FY 2017 and FY 2020. We already achieved ahead of schedule in FY 2019 the operating cost and overall cost reduction targets I mentioned at the Investor Day last year. We have an exceptionally lean organization. It is thanks to these achievements that despite the impact of COVID-19, the mobile communications business is expected to record a profit this fiscal year. As these examples illustrate, we have always taken bold action in the face of changing conditions and times of crisis. The COVID-19 pandemic has been exceptional in the way it has affected widespread and dramatic changes to lifestyles across society. In order to retain flexibility in managing our business against the backdrop of ever-changing operating conditions, it is important to maintain the profitability of our existing businesses.
No matter what the operating environment, we aim to generate a profit. In order to do that, we need to unleash the strength of cohesive management within the electronics business and strive to achieve optimal scale through product development, standardizing operations, and streamlining. Now, I will discuss some positive developments that have occurred in the last few months. In the TV market, demand increased as consumers spent more time at home due to COVID-19, and our BRAVIA brand increased market share, gaining a lot, especially in Japan. Despite the decoupling of communication charges and handsets prices, as well as a contraction of the market for high-end models in the Japanese market, we recorded favorable sales of our Xperia 1 II and Xperia 10 II models following advances in their camera, audio, display, and design features.
The camera business bore the brunt of the COVID-19 impact. In China, the quickest market to recover, we gained the top revenue share in all categories, including interchangeable-lens cameras, lenses, and digital still cameras in June, which includes Tmall's massive 618 Shopping Festival. Our latest model, the Alpha 7S III, which we announced last month, has been well-received in all regions and pre-orders have been strong. In addition, last month, The Associated Press Global Wire service announced that their photographers and video journalists around the world would exclusively use Sony's camera equipment. We have already begun delivering a wide variety of Sony products to them, including Alpha series cameras, XDCAM camcorders, and E-mount lenses. When we launched Sony Electronics Corporation in April, the first thing we did as a management team was to draw up a new company vision.
After discussing our aspirations to bring together our diverse range of businesses and lay the foundation for deeper cooperation and unified engagement, we established our vision as: continue to deliver Kando and Anshin to people in society across the world through the pursuit of technology and new challenges. At the core of Sony's electronics is technology. Superseding that is a spirit of innovation that drives us to take on new challenges, including developing new technologies. In addition to Kando, we included the word society and Anshin in our vision. The concept of Anshin was one we spent the most time discussing. We felt that Anshin encompasses the help we provide in the medical business, the trust people feel in the quality of our products, and the reassurance they feel when connecting to other people through communication networks.
It also signifies the peace of mind we want to bring to our customers in the midst of the COVID-19 pandemic. I believe this wide range of interpretations will foster diversity, and in turn, lead to the creation of new customer value and new businesses. We are currently engaged in internal discussions so that early next fiscal year, we can present you with our next mid-range plan, which will cover the three fiscal years beginning April 1st, 2021. Today, I'd like to give you a brief preview of the plan's overarching direction. Our strategy for the mid-range, which is rooted in our vision, is to achieve business growth and maximize the corporate value of Sony Electronics. Under this banner, we aim to expand business growth areas and undertake portfolio management-driven structural reform.
We will have a shared growth strategy under which all of us Sony Electronics will work together to develop new products and businesses by bolstering synergy through collaboration and by leveraging our visual, audio, and communications technologies to deliver value to customers that extends beyond reality, real-time, to remote activities as well. Today, I will discuss two concrete examples of the initiatives that we are undertaking. First is expanding the business of remote solutions for video. Last year, we collaborated with Verizon and NBC Sports to conduct an experimental trial of live video transmission using 5G technology during an American football game in the U.S., and we have conducted similar trials in Japan and Europe as well. Demand for remote accessibility during the COVID-19 pandemic has accelerated the shift businesses are making to digital.
We will invest in and expand our remote solutions business, which combines IP network technology and hardware products to address the need of the media industry, which has mission-critical requirements for transferring high-quality data in high volume. Creating reality by capturing images with cameras, which utilize Sony's imaging and communication technology, producing visuals from multiple remote locations, and transmitting them with extremely low latency or, in other words, in real time, is a perfect example of how Sony brings the 3Rs to life. In a broad sense, the cameras that vloggers use enable remote communication as well, and we intend to strengthen our video shooting business accordingly. I will discuss new customer value creation through large-sized displays. Our television business group has traditionally marketed flat panel LCD and OLED displays primarily to consumers. Our professional division has marketed projectors and monitors mainly for professional use.
Since the launch of the EP&S segment last year, the two sides have collaborated on technology development and have worked to better understand each other's customers while streamlining their previously separate sales channels. This fiscal year, we will start transferring resources from the professional unit to the TV business unit, and as of the second half of the year, we will consolidate all our display businesses under the management of Kazuo Kii. This will enable us to integrate a product lineup, gain design efficiencies, and improve profitability. Over the medium term, we plan to create new customer value through large-sized screens that are not defined by a display or applicable technology and cross the boundaries between TVs for household use and displays for professional use.
In terms of future sales expansion, the B2B market for displays is considerable, but Sony has allowed itself to be satisfied with too small a market share. We will enhance our strategy, defining large-sized displays of more than 100 inches as a target growth area. Earlier, I mentioned Anshin as one of the keywords in the vision. Not only has COVID-19 significantly transformed our business landscape, but it has made it all the more important for people to live with a sense of assurance, and I see a mid- to long-term business opportunity arising from these circumstances.
We have delivered value in the form of Anshin through our medical businesses, including endoscopes and digital microscopes from Sony Olympus Medical Solutions, our joint venture with the Olympus Corporation, which has roots in our digital imaging technology, clinical video solutions originating from the Belgian firm eSATURNUS that we acquired, and flow cytometers that assist with cell sorting. While coexisting with COVID-19, we are seeing a rise in demand for networked cameras to provide remote healthcare and online diagnosis. This has reminded us that digital imaging is also an Anshin business. Rather than limiting our medical business to imaging-related fields it has traditionally been involved in, going forward, we plan to explore opportunities to provide new solutions across the broad field of wellness that leverages technologies from all over Sony Electronics. COVID-19 has also increased the demand for fast and stable communications infrastructure.
For example, whereas individuals and families were previously mostly concerned with the downlinks that let them enjoy music or video content, there has been a sharp rise in demand for uplink connections suitable for web conferencing. We will redefine the network services business as one of Sony Electronics' Anshin businesses and augment its growth strategy as a generator of recurring earnings over the medium to long term. Sony Electronics will also proactively promote sustainability. Examples of environmentally minded efforts Sony has made with its products include reduced use of virgin plastic and adoption of recycled plastic in TV products, and elimination of plastic wrapping for small audio products and accessories.
We will be proactive in undertaking even more initiatives in the future as we strive to achieve the goal of the entire Sony Group, which is to have zero impact on the natural environment by 2050, as we strive to contribute to a sustainable society and planet Earth. In preparing the next mid-range plan, we are not going to be confined by existing businesses or product categories, and we have begun to explore new business domains that will lead to the next phase of our growth. Today, I will show you some of those. In the world of sports, we are working to derive value from data collected on the playing field. Already, we provide officiating systems to the world of professional sports, including line calling systems for tennis and video assistant referee systems for soccer games.
Going forward, beginning with baseball and evidenced by our experimental trial with the Tokyo Yakult Swallows team announced the other day, we are expanding our service offerings that utilize data on the movement of athletes and the trajectory of balls and other equipment captured by multiple cameras. Through cooperation with the R&D teams at Sony's headquarters and collaboration with other companies, we will pursue development of data analytics and video virtualization. This is part of our effort to create new sports entertainment and adopt service-based business models that differ from our traditional hardware business that are heretofore generated value through video and audio expression. Next, I would like to discuss the application of virtual reality technologies to video content production. At CES in January this year, we featured an exhibit on the possibilities for using new technologies and creating new businesses at Sony Innovation Studios.
In August, we established a virtual production laboratory in Japan at Sony PCL, which sits under Sony Electronics. The studio will be serving content production companies in Japan, as well as the design and marketing departments of companies that require high-resolution visuals. In trying to create extremely realistic content remotely in digital spaces that have no reality or real objects is a unique undertaking that came about only because Sony has both technology and actual filming facilities. We aim to leverage our technology to create new possibilities for the creative community. We have prepared a short video depicting the exploratory initiatives we have launched, including the two I just described. I hope it will give you a better idea of the direction we are hoping to take our businesses. What did you think of the video?
Since our founding in 1946, Sony has been taking bold actions in the face of a variety of environmental changes and business crises. The fact that we are living in a time that defines prediction makes it all the more important that we steer our company using the compass provided by the purpose of the Sony Group, our values, and the vision of Sony Electronics shown here. In order to remain a going concern over the long term, I believe it is management's duty to continue to generate profits regardless of the business environment, and to use the cash generated to lay the groundwork for future growth so that we can nurture the next generation of human capital and establish a strong yet flexible business foundation. We will continue to take on new challenges with the Sony spirit and we would appreciate your continued support.
Thank you very much for joining us today.
That has been the explanation by Ishizuka. Following this, from around 3:55 P.M., we will have a Q&A session for about half an hour. The analysts and institutional investors who have registered to ask a question in advance, kindly connect to the designated phone number. Those who have not registered in advance, you can listen in via the internet. We ask for your patience until we resume. We will be starting shortly. Please wait until we start. Thank you. Thank you very much. I'd now start the Q&A session. In addition to Mr. Ishizuka, there also will be Mr. Ichiro Takagi, who is the Senior Executive Vice President and Deputy Officer in charge of Electronics Products & Solutions Business. Also, the Representative Director and Executive Deputy President and COO of Sony Electronics.
We'll be joined by Mr. Yuichi Oshima, who is a Senior Vice President of Sony Corporation and CFO of Sony Electronics Corporation. If you have a question, please press asterisk and then number one. We will call on those who will be appointed to ask a question. After your name is called, please speak. Please limit your questions to two per person. If you are to ask a question in English, it will be translated consecutively into Japanese, after which there will be a response in Japanese. In order to avoid echoing or feedback, please make sure that you turn off all of the devices around you. If there are some connection problems or communication problems, and the communication is disrupted, because of time constraints, we will move on to the next person who will ask a question.
And if you would like to withdraw your question, please press asterisk and then number two. Now, we open the Q&A session. If you have a question, please press the asterisk and then number one.
Well, Ayada-sa n from JP Morgan Securities. Thank you very much. Ayada is my name, JP Morgan. I'd like to ask two questions, two points. Firstly, regarding next three-year plan, in terms of direction that you're pursuing, you talk of reality, real-time, and remote activities. In the world with COVID or after COVID, in terms of contents production, you have the strength and also opportunities. In the next three years, in terms of visual devices and services that you provide, do you have the strong feel that it will contribute to the top line? Can we expect that? These will be new business opportunities, but because of this COVID environment, is the top-line possibility higher now or lower compared to the previous times? My second point is about the medical services.
Earlier, a mention was made of the solutions to be enhanced in the wellness services. To realize these actually, Sony Life is now a full subsidiary, you can collaborate with this company. M3, you have stocks, share in that company. You're already working with the companies, are you going to enhance collaboration with these companies in the next three years more so than before? Collaboration with other companies also, is there a possibility that those collaboration efforts will become more visible in the future? To expand and enhance the medical services business, the idea of ROIC, you've been increasing the invested capital. Is that the case to increase your business? Are you going to form alliance with other companies in partnerships? Can you give us some comments on those?
Thank you for the question. Ishizuka speaking. I will basically answer the two questions, but, if need be, I'll be asking my colleagues to add words. The first question is about next MRP in the three-year period to be covered, and the world of COVID-19, remote content production, what will be Sony's strength, and how will it contribute to the performance? On this question, we are still in the midst of the COVID-19, so predicting beyond after COVID-19 will be difficult, but looking at the actual lines of business for broadcast services, the content production in the broadcasters. Broadcasters now are trying to avoid Three Cs and reducing personnel and, for instance, they want to be able to produce products from at home. That's the inquiry that we received. Our production team can offer actual solutions, so that in different remote locations, programs can be produced. That's happening already.
You saw in the video live content production example. It was just an image that you saw on the video, but both inside and outside Japan, a lot of inquiries have been received, and business has already actually started. In film production, it's still suspended. The movie production, it's difficult to reopen. Live concert entertainment is also facing a similar situation. I believe the potential is there, large potential is there, but in terms of contributing to actual sales and profitability, we are not able to foresee that yet. Going forward, we will not just sell our hardware product, but for remote production, for the services and these businesses, we, the Sony Electronics, we would like to offer solutions and conduct a recurring revenue kind of business.
Regarding your second question concerning medical and wellness business field, we’ve just begun working on the MRP, and we mentioned earlier. Earlier next year, MRP will be announced. Until that time, I must refrain from giving you details and collaboration with other companies or the related companies. Before that, as we, Sony Electronics, are concerned, we have to have a broad appreciation of the medical services so that where our strengths can be leveraged, and we are examining those possibilities at the moment. I first speak to the wellness, because previously we’ve specialized in surgical imaging, but going forward, outside of imaging, we believe that Sony Electronics technology can be leveraged so that opportunities can be realized. We started examining those. Concerning the invested capital and ROIC, as need be, how best we should invest that capital, we have to study that from financial perspective. Thank you.
Thank you. We move on to the next question from Citigroup. Ezawa-san, please.
Thank you. Ezawa from Citigroup Securities. I have two questions, partially similar to the previous question, but from a different perspective. First question regarding remote-related equipment or devices. As was mentioned in Ishizuka-san's response, you said that not just sell-through of hardware, but services or solutions on a recurring basis will also be a focus. The services and the recurring activities, can you share with us a little bit more in detail the concept? What exactly are you trying to generate profit through these services and recurring businesses? Filming and editing, are you going to be engaged in that, or are you talking about maintenance of devices? Maybe network communication services may be provided?
Do you have any specific ideas about the services of the recurring business that you have in mind? Second question, in the medical domain, also similar to the previous question, not just the equipment, but in services of recurring businesses, what are the specifics of the medical business? In where do you think you can leverage your strength in the medical field? Thank you.
Thank you. Ishizuka speaking. I would like to respond to the two questions. First, regarding in this remote activities. We are not just going to sell through hardware, but we want to also provide recurring business, such as services. For now, I cannot give you specifics, but maybe I can share some examples. For example, as of now, as I said, network services, we have Sony Network Communications like So-net or NURO Hikari. That is a typical recurring business.
Anshin is what we want to provide and redefine. In network communication business, we want to expand and strengthen this business, and that's the direction that we want to stipulate in our MRP. It's not just downlink, but uplink, because in web conferencing, the web camera images would have to go from the home to the cloud, so it has to be stable and fast, and broadband has to be enabled. That's the need globally. I think these network services would have to be strengthened. That's one idea. The next one is managed services. We internally call it managed services. That's for example, the sports, Hawk-Eye, sports-related business, that's a managed service example. Over several years, for each match, we would be paid for these services. That's a business model. Also individuals.
Sony PCL, we have a subsidiary with not so much of a big revenue, but the Hawk-Eye is being operated by Sony PCL in Japan. Virtual Production Lab, it's inside of this Sony PCL organization. This was to provide services to customers. These subsidiaries can be leveraged and expand the business. Also for broadcasting, we have made investments in companies overseas or have acquired them. We are experimenting, and where there's a good potential, we want to continue to invest. In medical field, originally, we used to have this printer business, and that's a big part of our top line. The paper and ink is very big in sales. We are doing similar things in life science. That's reagents for cell analysis. We want to try to develop reagents for cell analysis.
Those are still small businesses in size, but if we continue for a long time, we will be able to build our insight so that it could lead to growth business. Thank you.
We'd now like to go on to the next question from Morgan Stanley MUFG. Ono-san, please.
Ono from Morgan, thank you very much for this opportunity. I'd like to ask two questions, please. One is about cameras, the other is about TV and displays. First of all, camera. Ishizuka-san gave an explanation earlier. The full-frame mirrorless range could give you an edge, that would lead to growth and profitability, leading to the number one position in the industry. Already you have the number one position in the industry. Market growth, there's still some shrinking in the market, so that growth going forward. You use the camera technology, where will you be placing the focus? In particular, you have been talking about remote and virtual, I think that tends to be on a long time horizon.
In the sense of continuing the profit growth with the existing camera, how can you maintain the growth of profits? That's why I'm asking this question. Second question is about the display. Display, B2C, B2B, is going to be emerging, I think. Cameras, professional use and home use, there's going to be emerging. Compared to that, I think the element technologies differ quite a bit. Plasma, LCD, flat panel technology will be basis for some consumers, and then there will be larger size. Is it MicroLED or the higher functionality projectors? The new technology elements might be required, meaning it might require more investment. With regard to this field, is this going to be a preparatory period, or are you going to have some ideas that you can get the upside sooner?
Thank you for the questions, the two questions. Ishizuka for question one, and then technology part of two, Ishizuka, and then Takagi will supplement.
Camera business and the future, as you have indicated, in terms of the market, yes, we see a gradual decline. With COVID, the demand almost disappeared because of the big drop. Recently, it is recovering. That being the case, a full-frame mirrorless, and we've been concentrating there. Recently, the competitors have come out with new models. Actually, we welcome that because recently, our camera sales has not gone down. Actually, the other competitors are also increasing their sales, so that from single lens to mirrorless, we see the shift. That could grow. As a number one brand manufacturer, our mission is t o take on this challenge for growth and drive that growth.
A pillar of that is going to be video. There's Handycam, and there's also professional use, where you store and then edit. There's those where you shoot, and then you upload onto the network immediately to share, like what the YouTubers are doing or online videos. I think that's increasing with the dissemination of smartphones. Not just the professionals, but the amateurs or general users, we see the expansion rapidly. Vloggers, the ZV-1 camera is showing favorable sales. Alpha 7 Mark S, this is for professionals, and it is showing a better result than expected. With COVID, there is remote conferencing and online education, online diagnosis, so the camera orders are increasing. We don't need that as what you use in the web conference, the cameras in the PC.
There is also what was announced yesterday, Alpha, Cyber-shot. It could be used as a web camera, and Imaging Edge software is disclosed to the world for free, and it is adapted to 35 models. I don't know if this is going to contribute to sales right away, but we find it to be a new opportunity. About your question on the display. Actually, flat display and projector, the image processing can be common to both. It's not so much new investment, but there is the merit of integration which can be leveraged quickly, so that the development can be done together, then we can study the strategy, and Takagi can supplement.
Takagi speaking. With regards to display, as Ishizuka mentioned in the message, for more than 100 displays, we are going to have integration under one management.
In the past, we had projectors for home and for business use, that is the professional team, professional unit. Then we had those for monitors for companies, the schools, and hotels. Some monitors were done under the BRAVIA brand. Then there was the studio monitors for professional use. We are going to integrate that for one management, and sales too right now. One, we are going to merge into one platform. The image engine, one image engine, and the device could take many forms. Our company basically can choose the device, and we're talking about Micro LED and Mini-LED, and naturally, LCD. In various formats, we can apply to the large screens. Using the image engine, which sales channel and which larger size the display will be sold, that will be considered in the business plan together.
We will also conduct product development from that position. We have to recover on the investment, and we're going to continue to invest. In the next three years, for sure, there will be contribution to profit, we believe. That's all.
Thank you. We'll proceed to the next question. Nakane-san of Mizuho Securities.
Thank you. Nakane speaking. Can you hear me?
Yes.
Thank you. I'd like to ask two questions, please. Firstly, Ono-san was asking about display. The CLED that you are handling already, after integration, what will happen to this business? What sort of evolution are you thinking about? You have to include capacity, but that will require investment. What's your idea about investment? As things stand now, what are your views about this, if you please? Also, secondly, about sales channels and sales companies, particularly internationally outside of Japan. There'll be a lot of ECs, e-commerces. What will be the structure of the sales companies in line with that? What has happened to Best Buy is one example.
Are you going to do something like that, or what about Sony Store, the online stores? Your in-house direct sales, what will be your idea about direct sales going forward? The two questions, please.
Thank you very much. I received two questions. Firstly, I, Ishizuka, will answer. The second question will be answered by Mr. Takagi. About CLED and our view on displays, including CLED, we have the integrated management. As we do that, the deficit in devices will be overcome, regardless of deficits for the customers. We have the lineups, we are considering a portfolio to do this vertically or horizontal. The CLED is for ultra high-end, the niche premium zone will be fit for that market.
To do this for the lower market, we will not only consider in-house production, but we'll consider devices by other companies, so that we can design and produce that will meet the need and demand. This means that we are not considering a large-scale investment in devices. As Takagi-san said, our strength is our imaging, processing and imaging engine that we have. There, for B2C and B2B, Sony will intensify our strength going forward. About the sales processes, Takagi-san will answer.
Takagi speaking. About e-commerce, in the coronavirus situation, sales at store are locked down or shut down completely for extensive period of time, March to May and June. During this time, the proportion of e-commerce increased significantly, particularly in China. Basically, 60%-70% of business is done by e-commerce for a time.
Store sales, once they reopened, the portion of e-commerce actually declined. Trend-wise, e-commerce, the proportion will continue to increase by 5% or 10% annually, but that doesn't mean that it would increase overnight. It so happened. We look at the e-commerce situation in all the regions, and we will take account of the proportion in different geography. We will strengthen the e-commerce team in the sales companies, and also we consider better balance to shift and change resources, resource allocation. E-commerce doesn't require personnel cost because there's no stores, so we could reduce that kind of cost. Depending on the category and depending on the region, we will try to be flexible in considering what would be the optimal operation for the sales companies.
As far as Sony Stores are concerned, basically centered in Japan, but internationally in Asia, there are Sony Stores, our own direct-to-customer, D2C businesses. On those, in the days ahead, we will continue to strengthen these operations. I cannot say anything about proportion that they will account for, but basically because of Sony's vision to be close to people, that is our purpose. Therefore, to be closer to people, D2C, direct to customer, is very much an important touch point with our customers. Thank you.
I'd like to now invite the next question from Credit Suisse, Nishimura-san, please.
Thank you. I have two questions. First of all, regarding the operational costs and how you think about it. Up to now, you have been reducing the operational costs, but going forward, I think you're going to make investments as well. What are you going to do with the operational concept? Mobile communications, are you going break even this fiscal year, but what is going to be the situation going forward? My second question is regarding collaboration. Are you going to collaborate within and outside of your own company? What is the situation now? How is it progressing right now? For example, in terms of solutions business, you can standardize your technologies at Sony and collaborate within Sony, but also you can collaborate with different partners for each project.
How are you going to go about the collaboration within and outside of the company?
Thank you. Ishizuka speaking. Thank you for the two questions. One is regarding operational costs, and second one is a collaboration with outside companies. I would like to talk about mobile situation, and then also Oshima will talk about the situation. Regarding mobile communications, like I said, the fixed cost was reduced, outperforming our expectation. We are very lean now. I think it's like a body fat percentage of 5%. We are very, very lean now. Now that we are very lean, we're not going to be leaner, but we want to now make steady growth so that we will be able to generate revenues in a stable manner. The operational cost for the EP&S as a whole, maybe Oshima can respond.
Thank you. Oshima speaking here. Over the last few years, OpEx, including fixed cost, has been reduced. In the mobile business, thanks to such efforts, we are now expecting to record profits this fiscal year. The top line and marginal profits, we have tried to optimize our business structure in line with the business environment. Of course, there are some head count-related costs and customer service costs and IS costs and design or prototyping costs. Also developing a sales channel, that also increased costs. In EP&S, this is going across some businesses, and we are trying to generate new businesses. At each of the units, they have their own business operations, and they have been optimized based on their own business, and also around their business.
We want to standardize or try to make them uniform so that we will still be able to reduce further the operational cost. With the EP&S as a whole, we want to try to generate better effects and reduce costs further. Thank you.
Thank you. Regarding your second question, Ishizuka will respond. That is a collaboration with other companies.
In last few years, in the B2B professional business domain, we have been making some investments, medium and small, including medical business. What we have learned from that experience is, in the B2B business, for each of the deals, we will be investing for that particular solution. There's still an issue with the scale, and the efficiencies in terms of recovering the investment has been a challenge. We want to try to standardize as much as we can.
However, technologies and the solutions may take on different forms, and it's difficult sometimes to standardize. When we partner with somebody or make an investment in somebody, we want to have a Sony Electronics common, or maybe even across business unit technology. We want to make sure that there are some commonalities, so that we will be able to evaluate the potential of our business partner and have a good process to be able to assess them and evaluate them properly. That's exactly what we are trying to do now. We are now considering some potential partners for collaboration. Thank you.
Our time is now up, so the next person will be the last question. Please limit your question to one question. SMBC Nikko, Katsura-san.
Katsura from SMBC Nikko. Today, at this timing, you held a briefing, and the key message, the most important message is what I want to ask you. That is, for professional use, you're going to have an integration, and next year, you're going to be inheriting the Sony name. You have disclosed your vision. Now, you had very good things in Atsugi, and then there have been, for security, growing markets, too. By incorporating that, can you make changes? JPY 25 billion, is it? I think, through these efforts, you have done all kinds of actions and you've completed them, and then you're going to make a fresh start next year. Is that it?
Ishizuka will now be answering.
What is the most important message this time? You have indicated the professional use integration. Professional business, that's not the main message. SIPS, we have had a unity in the professional business, so it's not something that EP&S is doing anew. However, in terms of the business result, there are some issues, and we are making those challenges. The key message that we want to communicate, Sony Electronics is going to start anew as Sony Corporation next fiscal year. We have a solid vision, and based on that solid vision, the mid-range plan will be established, the strategy will be established, and people will think for themselves how to take on the future. Vision, strategy, and the execution plan and the human resource development so that the future can be passed on to the next generation.
We would like today to be a kickoff, and inclusive of stakeholders in and outside the company, we want to emphasize this and work hard for the realization of our business plan. That is what I want to communicate as the key message today. Thank you.
This concludes the Electronics Products & Solutions business briefing of Sony Corporation. I would like to thank all of you for your participation. Thank you. Thank you. Thank you for your participation.