The new Sony financial report shows that the sales of gigital imaging products declined by 2.1% to 162.5 billion yen (about 1.46 billion €), although the digital camera sales rise to 6.2 million units (of the order of 1 million shares, or nearly 20% more than in Q2 09). The cause of that decline are the decreased sales prices. The [shoplink 3003]Sony NEX[/shoplink] cameras pushed the unit sales.
The annual forecast for digital camera sales leaves Sony unchanged at 23 million units.
17 Responses
Looks like Sony better put the money into the financial services business unit……
Consumer: 2%
Netwerk: 2%
Picture: loss
Music: 7%
Service: a whopping 20% return
The increasing exchange rate of YEN could be a reason too?
Absolutely. The current strength of the Yen is killing a lot of Japanese companies that do most of their sales outside of Japan.
I doubt it in the case of Sony.
Doubt what? That Sony is a Japanese company? That Sony does most of their sales outside of Japan?
Take the example of the US dollar and the dual lens NEX-5 kit. When the NEX-5 was first launched in the US in May it sold for around the equivalent of 66,00 YEN. Today, less than 57,00 YEN equivalent. It’s not a pretty picture. Sony is rumored to be considering outsourcing the remainder of their LCD production (high-end models) to China, and Japanese auto manufacturers are also considering outsourcing the remainder of their production lines to outside of Japan. The government in Japan is receiving a lot of flak for seemingly doing little to deal with this ugly trend.
Yes, Sony is a japanese company and does most of their sales outside. The problem is they are already outsourcing a lot of stuff. How much the Yen would affect that?
The price of the NEX falling is not necessarily related to the economy, but also to technology.
Sony is selling today quite the novelty products (NEX, SLT) at really interesting prices, hence the boost up in sales numbers. I think this is the predominant reason, although I certainly do not disagree with you that the Yen had some effect.
not going to do the math here, but yes, Vlad, exchange rate is indeed a huge factor especially for large exporting companies like Toyota, Honda, and Sony.
Ok, that is what I don’t get – if Sony is making cameras in Japan and selling them overseas – surely a huge factor. But what when those cameras are made in Thailand?
Haven’t looked at this in detail, but I wonder if there’s a separate line for photo sensors – remember that every D90, D5000, and D3X (and others) sold carries a Sony sensor – and that Sony isn’t giving those away. Sony’s involvement in imaging is therefore more profitable than a scan of camera sales would infer.
I found the detailed link: http://www.sony.net/SonyInfo/IR/financial/fr/10q2_sony.pdf
Yes, the exchange rate impact affect quite a lot for Japanese company, and Sony is no exception. But still they did well this year, especially LCD TV and semiconductors (= CMOS things?).
Sony operates on a fiscal year beginning the second quarter of the calendar year, and ending the last day of the first quarter of the calendar year–in other words from April 1 through March 31. Fiscal years are generally labeled by the year in which they end, so that April 2009 through March 2010 becomes FY 2010. If these really are Fiscal Year reports (and I suspect that they are since it would be truly extraordinary to have any such reports for the quarter that ended just five weeks ago), then we are comparing july-September 2008 with July-September 2009. In that context, the numbers make sense: the financial services sector was the major cause of Sony’s collapse in FY 2009 (ending in March of 2009), but recovered to some degree in the year 2009, FY 2010. Meanwhile, I suspect that camera sales & profits have been phenomenal so far in FY 2011, of which we are now in the third quarter.
This proves that volume and market domination doesn’t necessary bring the earnings back. Perhaps, it’s time that Sony take the higher profit margin (aiming at higher end camera models) approach to get better earnings.
I disagree!
You have to establish the brand as a serious competitor before you can raise the price. No one will buy into a new, un-tested system that no one ever heard of.
But if everybody knows about a brand with positive experiences and a moderate fan-base already owning parts of the brands products. The company will be able to rise the price without loosing as many customers.
I believe that Sony aim on a long term strategy rather than quick profits.
Probably you’ve misunderstood what I’m trying to say here. Take for example; Ford and Ferrari or a simpler case, Fiat and Ferrari. Ferrari has to only sell 1 to get and gain the earnings while Fiat has to sell probably 10K of their own manufacturing car. Having a high-profit margin approach doesn’t mean you neglect your “long-term” servicing. In the photography world, (Hasselblad – the Ferrari) while D-SLR would be the Fiat/ Ford; and this is where I suggest that Sony could go into; that is to shift their focus to upper tiers model for bigger profit margin. Of course, there’s always another segment of Lexus/BMW/Mercs-like (Canon 5DmkII, 1DMark, Nikon D2x, D3x, A900) to compete with the Ferraris.
Considering they’re already starting to seed rumors on the A7xx new technology built-in, I don’t think you will have to wait long for those high-end models to start showing up.
So with the skyrocking sales with the NEX and with the E55, is Sony selling these models at a loss just to gain market share? I would think even with low profit margins these sales should soon turn into profits as the high development costs are recouped by Sony.
I’m of this opinion too.