Sony

Sony posts quarterly financials - Xperia smartphones still a money sinker, but image sensors turn millions in profit

posted by Luis D. / Oct 29, 2015, 8:03 AM

Sony posts quarterly financials - Xperia smartphones still a money sinker, but image sensors turn millions in profit

Sony is another smartphone-making company that outed quarterly financial results today. Looking at the second quarter of Sony's fiscal 2015 year, the bad goes with the good, and unfortunately, Xperia smartphone and tablet sales still dwell on the bad side of things. Sony Mobile Communications is the only technological division to sustain an operating loss ($172 million) off of $2.33 billion in revenue, meaning mobile devices remain a money sinker for the company. Indeed, Xperia sales have fallen 15.2% from the same period last year, which Sony actually attributes to its own strategic decision "not to pursue scale in order to improve profitability."

Among Sony's many businesses is image sensor production, where the company has attained a stronghold over the years. Having secured clients as big as Apple, Samsung, and Motorola for its Exmor mobile imaging sensor, it's no surprise that operating profit is up 16% over a year, with sales reaching $2.2 billion. Camera component production is doing mighty fine as well, posting $215 million profit on $1.5 billion revenue. Witnessing success, Sony announced its plans to turn image sensors into a separate corporation, Sony Semiconductor Solutions, coordinating the move with acquiring Toshiba's image sensor business. The two corporations signed a memorandum yesterday, negotiating the transfer of Toshiba-owned fabs and equipment to Sony.

In total, Sony Corporation generated $280 million in net profit on $15.8 billion in revenue, with an operating profit of $775 million. This is a better result than a year ago, when Sony had to sustain a difficult $1.2 billion net loss in its smartphone business. Alas, the company's Xperia smartphone and tablet strategy isn't exactly clear right now. Sony is being realistic about its limited chance of success in the tough smartphone market, scaling down operations by decreasing its presence in emerging markets where value phones are in abundance. However, Sony is also struggling to push its premium Xperia devices in the larger markets. Both factors are unfavorable towards its goal of making the smartphone division profitable, or at least stopping it from bleeding money.

source: Sony (PDF file) via The Verge

FEATURED VIDEO

Options

25 Comments

1. jesus_sheep

Posts: 279; Member since: Apr 18, 2015

They should really bring a new design to their phones and that will be a game changer.

posted on Oct 29, 2015, 8:18 AM 4

4. Feanor

Posts: 1367; Member since: Jun 20, 2012

I agree. Their design is sleek but too discrete, not memorable.

posted on Oct 29, 2015, 8:29 AM 0

16. Xperia14

Posts: 1208; Member since: Sep 01, 2015

The green (and graphite black) Z5 is the most beautiful phone till date in my opinion. Too bad it doesn't get a review from PA.

posted on Oct 29, 2015, 1:28 PM 2

2. carlemillward unregistered

I think Sony's Z5 series is actually good. The other E, M, C series are also relatively good. The 6 month cycle though... Only Japan appreciates this. What I like is that they update a lot of their phones, most are getting Android 6.0 soon.

posted on Oct 29, 2015, 8:22 AM 3

3. cripton805

Posts: 1485; Member since: Mar 18, 2012

I don't think they could do much more. It's a rectangle. Anyhow, I think they just haven't been able to build a loyal customer base. I think they should do something to pair it with a PS4 somehow. The gaming side is doing very well. They can add functionality to games using Sony phones somehow. Or add to the hardware as a peripheral.

posted on Oct 29, 2015, 8:26 AM 0

17. downphoenix

Posts: 3165; Member since: Jun 19, 2010

They already have. Xperia Z3 and later support Remote Play functionality just like a Vita does, jsut have to pair a PS3 controller to it.

posted on Oct 29, 2015, 2:55 PM 0

5. Feanor

Posts: 1367; Member since: Jun 20, 2012

From these numbers it looks like the smartphone business is losing money but still bigger in size than the image sensor business. This means to me that Sony still needs to keep the business. If the image sensor business gets unfavourable conditions (e.g. Apple moves to different supplier), then Sony device business will sink completely. It looks like they need to keep trying with the smartphones as a potential future growth area.

posted on Oct 29, 2015, 8:33 AM 1

6. Zylam

Posts: 1817; Member since: Oct 20, 2010

Sony, LG and Samsung are lucky they have other businesses to learn on, despite what the fandroids say, everyone including them know Android is a loss machine, besides Samsung noone makes anything substantial enough to grow. HTC is getting the worst of it and they don't have anything else to relay on, just have to take grunt of the attack head on. These Chinese Oems drove costs down for us as buyers but in doing so they took a knife to the international Oems necks, it was an unintended consequence and now all Android Oems are paying the price. Glad the Nexus line exists. Hope Google buy HTC and do what Microsoft did and develop their own hardware.

posted on Oct 29, 2015, 8:53 AM 3

8. carlemillward unregistered

Well that is probably why they started making the HTC Vive and HTC Re and the reasonably delayed HTC Grip. Smartphones is a very competitive business, especially Android. Which is why they are placing much emphasis with the A9 on rapid updates which is Android's Achilles's heel. Also Chinese OEMs weakness.

posted on Oct 29, 2015, 9:07 AM 0

15. jroc74

Posts: 6023; Member since: Dec 30, 2010

Now see BobbyBuster, this is how you do it. I can agree with this.

posted on Oct 29, 2015, 12:41 PM 0

18. downphoenix

Posts: 3165; Member since: Jun 19, 2010

Sony does make money off Android... just not the smartphone division lol.

posted on Oct 29, 2015, 3:02 PM 1

7. mrochester

Posts: 1000; Member since: Aug 17, 2014

Sony's phones look great, but the biggest reason they don't sell is because they run Android. You can get hundreds and thousands of Android phones from other manufacturers. Sony needs an OS that makes their devices unique, like Apple has

posted on Oct 29, 2015, 8:58 AM 0

19. downphoenix

Posts: 3165; Member since: Jun 19, 2010

And spend probably hundreds of millions on R&D for a new operating system, app store, authentication servers, and all the other costs involved for maintaining a mobile OS. There is a reason Blackberry has switched to Android.

posted on Oct 29, 2015, 3:17 PM 2

9. Khushwinder94282

Posts: 3; Member since: Sep 13, 2015

cause there products are nowhere near in value for money proportion,at least in india

posted on Oct 29, 2015, 9:11 AM 0

10. vuyonc

Posts: 1091; Member since: Feb 24, 2014

Get rid of the 6 month flagship refresh cycle, streamline the 2016 portfolio and evenly spread out the new phones. I do find it strange that the mobile division gets higher revenue than the sensor division though.

posted on Oct 29, 2015, 9:12 AM 0

11. vuyonc

Posts: 1091; Member since: Feb 24, 2014

And end the tablet line (or after a compact tablet). The ARM Tablet market is dying.

posted on Oct 29, 2015, 9:18 AM 0

20. downphoenix

Posts: 3165; Member since: Jun 19, 2010

well phones sell for a lot more than camera sensors.

posted on Oct 29, 2015, 3:18 PM 0

12. zeeBomb

Posts: 2318; Member since: Aug 14, 2014

The final fantasony quest continues...

posted on Oct 29, 2015, 9:41 AM 0

13. gazmatic

Posts: 809; Member since: Sep 06, 2012

where is the "nobody is making money on android" guy? Sony fails because their phones are too fukking expensive.

posted on Oct 29, 2015, 11:19 AM 3

14. ryq24

Posts: 875; Member since: Oct 17, 2011

Sony Phones are just too expensive. There are a lot of alternative phones out there that has better features and are a lot cheaper.

posted on Oct 29, 2015, 12:05 PM 3

21. Rock_Hardwood

Posts: 117; Member since: May 11, 2015

I would not even consider any smartphone other than apple.

posted on Oct 29, 2015, 3:24 PM 0

24. Xperia14

Posts: 1208; Member since: Sep 01, 2015

Yeah, f**k battery life, IP68, micro SD, great camera, FM radio, etc. Who wants that?

posted on Oct 29, 2015, 5:11 PM 0

22. jpbent

Posts: 2; Member since: Sep 20, 2015

Sony!!!Just bring the z5 to the US big 4 carriers and it will sell like hot cakes!!

posted on Oct 29, 2015, 4:09 PM 1

23. Af1rPA

Posts: 712; Member since: Jun 12, 2014

After 5 generations or more of the X line series you would think Sony would realise what they're doing wrong. Refresh the series by bringing out a new design. The phones already have great internals.