What is the expected increase in operating income for the Financial Services segment in fiscal '20 compared to fiscal '19
 shift to mid-range and moderately priced models in that market resulting from the impact of the spread of COVID-19 and significant reduction in component and finished goods inventory by Chinese customer. Profitability is expected to be impacted by a decrease in gross margins and an increase in depreciation and manufacturing-related costs associated with production equipment we purchased in the previous fiscal year when we expected growth as well as higher research and development costs. We do not expect to grow sales of mobile sensing products compared to fiscal '19 because adoption by smartphone makers has been slow and sales of flagship models, which already use our products have decreased due to the shift in market conditions. Sales of image sensors to AV have also decreased due to the contraction of the sensor market for digital cameras, resulting from the impact of the spread of COVID-19.
We expect the market to contract in one year as much as we had previously expected it would contract over the next approximately three years. In order to respond quickly to the changes in the environment, especially for image sensors for mobile products, we will modify our strategy, mainly in the areas of investment, research and development and customer base. We have already significantly reduced investment in capacity to supply demand in the fiscal year ending March 31, 2022, because we can supply that demand by stockpiling strategic inventory through utilization of our excess production capacity this fiscal year. The forecast for cumulative capital expenditures for the three fiscal years began April 1, 2018, which we explained in the past, has been reduced JPY 50 billion from approximately JPY 700 billion to approximately JPY 650 billion.
And we are carefully reviewing the timing of planned capital expenditures in fiscal '21 and beyond. We will review the projects and priorities for research and development spending as well to ensure that they fit with the recent trends in the smartphone market and changes in our major customers' needs. However, in order to maintain and increase our future technological competitive advantage, we will not drastically reduce the number of projects or the budget. We intend to more proactively expand and diversify our customer base, which we're cautious to do previously due to production capacity constraints.
Over the mid to long term, we will work to expand the applications for image sensors and the market overall by introducing edge-sensing products that use senses equipped with AI processing functionality, and we will steadfastly work to grow this business. We plan to complete within approximately one year an enhancement of our business model to adapt to the recent changes in the environment, and we expect to return the business to the path of profit growth from the second half of fiscal '21. Last is the Financial Services segment. Fiscal '20 quarter 1 Financial Services revenue increased 33% year on year to JPY 446.8 billion, primarily due to a significant increase in net gains on variable insurance investment in the separate account at Sony Life.
Operating income increased JPY 1.1 billion year on year to JPY 47.2 billion. Financial Services revenue in fiscal '20 is expected to increase 7% compared to fiscal 19 to JPY 1.4 trillion, and operating income is expected to increase JPY 12.4 billion to JPY 142 billion. On July 13, we completed our public tender offer for the shares of Sony Financial Holdings, SFH, not held by Sony. The shares of SFH will be delisted on August 31 and SFH will become a wholly owned subsidiary of Sony on September 2.
The Financial Services business managed by SFH has a stable high level of profit and is a core business of Sony that plays a role in our long-term growth strategy. By eliminating the listed subsidiary relationship between SFH and Sony, we intend to increase the speed of decision-making, enhance management optionality and further improve the value of the business. In addition, by capturing the minority interest and realizing tax benefits, we expect to increas
 shift to mid-range and moderately priced models in that market resulting from the impact of the spread of COVID-19 and significant reduction in component and finished goods inventory by Chinese customer. Profitability is expected to be impacted by a decrease in gross margins and an increase in depreciation and manufacturing-related costs associated with production equipment we purchased in the previous fiscal year when we expected growth as well as higher research and development costs. We do not expect to grow sales of mobile sensing products compared to fiscal '19 because adoption by smartphone makers has been slow and sales of flagship models, which already use our products have decreased due to the shift in market conditions. Sales of image sensors to AV have also decreased due to the contraction of the sensor market for digital cameras, resulting from the impact of the spread of COVID-19.
We expect the market to contract in one year as much as we had previously expected it would contract over the next approximately three years. In order to respond quickly to the changes in the environment, especially for image sensors for mobile products, we will modify our strategy, mainly in the areas of investment, research and development and customer base. We have already significantly reduced investment in capacity to supply demand in the fiscal year ending March 31, 2022, because we can supply that demand by stockpiling strategic inventory through utilization of our excess production capacity this fiscal year. The forecast for cumulative capital expenditures for the three fiscal years began April 1, 2018, which we explained in the past, has been reduced JPY 50 billion from approximately JPY 700 billion to approximately JPY 650 billion.
And we are carefully reviewing the timing of planned capital expenditures in fiscal '21 and beyond. We will review the projects and priorities for research and development spending as well to ensure that they fit with the recent trends in the smartphone market and changes in our major customers' needs. However, in order to maintain and increase our future technological competitive advantage, we will not drastically reduce the number of projects or the budget. We intend to more proactively expand and diversify our customer base, which we're cautious to do previously due to production capacity constraints.
 Over the mid to long term, we will work to expand the applications for image sensors and the market overall by introducing edge-sensing products that use senses equipped with AI processing functionality, and we will steadfastly work to grow this business. We plan to complete within approximately one year an enhancement of our business model to adapt to the recent changes in the environment, and we expect to return the business to the path of profit growth from the second half of fiscal '21. Last is the Financial Services segment. Fiscal '20 quarter 1 Financial Services revenue increased 33% year on year to JPY 446.8 billion, primarily due to a significant increase in net gains on variable insurance investment in the separate account at Sony Life.
Operating income increased JPY 1.1 billion year on year to JPY 47.2 billion. Financial Services revenue in fiscal '20 is expected to increase 7% compared to fiscal 19 to JPY 1.4 trillion, and operating income is expected to increase JPY 12.4 billion to JPY 142 billion. On July 13, we completed our public tender offer for the shares of Sony Financial Holdings, SFH, not held by Sony. The shares of SFH will be delisted on August 31 and SFH will become a wholly owned subsidiary of Sony on September 2.
The Financial Services business managed by SFH has a stable high level of profit and is a core business of Sony that plays a role in our long-term growth strategy. By eliminating the listed subsidiary relationship between SFH and Sony, we intend to increase the speed of decision-making, enhance management optionality and further improve the value of the business. In addition, by capturing the minority interest and realizing tax benefits, we expect to increas