Sony CEO Kaz Hirai

As Japanese tech giant Sony restructures its businesses, there are signs of more growing pains to come. The company revealed that it expects losses of ¥50 billion ($489 million) in the financial year ending March 2015, whereas analysts had predicted a net profit of ¥59 billion. The previous year saw the company lose ¥128.37 billion ($20.62 billion), and Sony's financial woes continue despite strengthening sales of its Xperia smartphones.

Figures spotted by Engadget in Sony's end-of-year report indicate that sales of Sony's smartphones rose by around 20 percent to just under 40 million units, as Sony fortified its high-end presence with phones like the Xperia Z, Z1 and Z1 Compact and launched more mid-range products. It appears PlayStation 4 launch also made a strong contribution to Sony's bottom line, with gaming sales up 53 percent.

Source: Engadget, The Wall Street Journal

 

Reader comments

Sony expects another year of losses, despite increasing Xperia sales

49 Comments

The jig is almost up Sony. Your business can't survive much longer. Even PS4 to isn't saving you as much despite its increasing sales.

Just let Google buy you and call it a day. Those Xperia phones have a lot of potential with the Z2.
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One should commend Sony's leadership though. Unlike what happens in European and American companies, at Sony the CEO and other executive leaders have cut in half their salaries and abdicated from the normal prizes they get. In Europe, for example, that pig Eflop got 25 million for ruining a company.

Sony is a big company, almost too big for their own sake. Let us see how the restructuring goes and hope for the best.

It's funny that I am actually rooting for Sony to right the ship these days (after many years of resentment left from some purchases that I regretted, and some ignorant loyalty to their brand). I don't play console games, but thank goodness for the Play Station division. Even with the huge success of the Play Station, they still need to have some other revenue source to take the place of the old Trinitron tube that they built their empire on (which was amazing but was obsolete over a decade ago) or simply accept that Play Station is all that they should do anymore. They still are over bloated and have only one respectable product division.

Their audio products are pretty good too.

And when it comes to design, their products are among the best, overpriced it may be. They're like the Apple for other brands.

I use to hate Sony. They use to love using proprietary media and other crap that made their products "different" but in reality it was just a pain.... memory stick duo?!?! really?!?! anyway, they've come a long way and I truly wish them the best. I was really excited when I first heard the z2 was coming to verizon but it looks like that may have changed. Hopefully they figure out their supply chain issues or whatever it is and the z3 actually makes it over.

Interestingly, Blackberry reported similar figures for their year end and based on a far smaller turnover, but the doom mongers love to circle, declaring the end is high.

Bad news sells, whereas good news doesn't, so as long as the press don't get fixated on Sony's woes, there's every chance they can turn the business around...

While I do agree that is true, BlackBerry have had a declining market share for years, and it is extremely bleak looking for them, due to people moving on to better and more modern platforms. Sony has a expected growth outlook, and a whole future in Android, so it doesn't look quite as bad as BlackBerry, which is pretty much dead to the average consumer.

Got Nexus?

Yes, Blackberry were in decline, but what I tried to do was take a snapshot of Sony and Blackberry year end accounts and compare them as there are some similarities - Blackberry possibly heading out of loss-making and Sony diving like a sub on full alert.

Blackberry made a smaller loss (and on smaller turnover than Sony) than share dealers anticipated; Sony on the other hand made a thumping loss when dealers thought they'd make a small profit. All I wanted to highlight is that if Sony don't turn around sharpish, when the press smell a failing company, they love to spread the news, so I'm hoping the turnaround happens quickly for Sony's sake.

Similarities sort of end at that point - Blackberry only sell phones and software, Sony have an empire....

Haven't got a Nexus, but had a Nexus 5 until my wife thought she preferred it! Admittedly I'm intrigued by OnePlus One... (haven't got Blackberry either)

Blackberry, unlike Sony and exactly like HTC, has nothing to fall back on to prop up those crappy sales and ever declining marketshare. Sony has several other divisions to catch the fall and keep the cash flow going. They do not need to rely on mobile to keep the lights on.

Yes, that's my point, but even with phones sales increasing 20% and PS4 sales making bigger contributions, up 53%, they aren't doing well and as the article says they have forecast another albeit smaller loss for this coming year. I hope they turn it around quickly.

be a shame if sony sank! never been one for the ps3 or 4 but the phones are belters of late!

from my old note3 which i had to sell my soul for;)

Don't these companies get the picture that its only room in this world for Samsung and Apple? Sony does make nice phones but obviously people don't want them. It's only a matter time before companies like Samsung clone, oops I mean LG and HTC go belly up...
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LOL you're really going to say the biggest thieving OEM is a victim of theft? HTC and LG are actually innovative unlike Sapple. I mean "Samsung."

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HTC, a Samsung clone?

Please tell me what you're smoking. Seems pretty awesome! :D

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$489 million is chump change. Assuming they could make $200 per device, which is an assumption but not outlandish, they'd only need to sell 2.445mm devices. Sammy does that in a weekend, and IIRC the GS4 cost them $237 to make and it sold for $600.

no the carrier sold it for $600, who know what the OEM sells it to the carrier for, but I would be ok with saying 450. One other thing. Sure it costs$237 to make, but how much more for R&D, marketing, packaging, shipping.....the list of intangibles goes on...

Good point. I assumed the intangibles were incorporated into the overall cost of the device, but that would be incredibly difficult to calculate even by Sammy, let alone a third party. We'll just say they make a rather incredible profit on the hardware side minus intangible costs. We'll say somewhere along the lines of 50%. More to the point, Sony could recoup their losses rather easily with their economies of scale. Could. We'll see.

yes they could, and yes they still make a metric butt ton of cash on each phone. I do not know what the mark-up is on electronics, but I do know a few others. For shoes, it is called doing the triangle. Manufacturer sets the price, retailers triple it, then mark it down 25%.

The only ones that are close to fair (frome the consumer point of view) is Nexus and Moto. Moto will more than likely change in the next year (if lenovo gets them) and Nexus is changing. The war will be in the trenches with the likes of the Moto G, Z whatever mini and stuff like that...

I don't think that'd be the end all be all, but it certainly wouldn't hurt. I know a lot of people that would love the Z1 Compact or the Z2, they just don't want to go through the hassle of importing one.

+1
Alotta money to be made here.. That Z2 would sell if they market it & make it available here..

Posted via Android Central App on The Nexus 5

+1

I work for a government agency that *indirectly*deals with mobile and landlines. A division of ours certifies them for particular uses (this is how I get to play with all the phones for a month or so) and we do not even bother with Sony. To hard to get and not many people do here in the states.

waaaaaaaiiiit a minute... You mean over charging for products in a poor economy isn't panning well for them?? Who would have guessed? [sarcasm implied for those inept people]

Vaio computers haven't done well... why? Because you can buy a computer/laptop/tablet with all the same specs for a third of the cost, through any other manufacturer. A competing price tag would have pushed their product through name recognition, and pulled stronger profits through volume. Sony should have figured that out after year 1. Same goes elsewhere, where they losing money (basically all hardware sales, besides PS4 --- and technically they're losing per unit sold on the PS4, in hopes to make up through PS+ subscriptions).

Agreed. The first word that comes to mind when I see anything Sony is "overpriced".

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I know they don't want to compete with Sammy and Apple here in the States, but they should know that there are people here that want Sony Phones. I switched from Verizon to T-Mobile to have a bigger choice of phones. I heard about the Z2 and had a nerd "wet dream". Only to find out its not coming here or its going to be a Verizon exclusive. WTF?!? That's not how you sell phones in the U.S. Sony.

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Why can't Sony bring their flagships to all of the american carriers like everyone else? I think their fortunes would improve if that were the case.

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Agreed. Much as I like Moto lately, I think Sony's phones are dead sexy and wouldn't mind having one myself.

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Sony doesn't know how to sell phones. Sony doesn't care about the American people either. I feel comfortable enough to say they're getting their just desserts...

I believe you have your Chinese Yuan and Japanese Yen confused with those dollar figures. Should be "¥128.37 billion ($1.26 billion)"

Yea, the numbers are a little bit confusing. Perhaps you guys need a better currency exchange app ;-)

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The main reason their losing money is because their laptop and tv division their just not selling as they use to especially on a very crowded market. They need to focus on what they are succeeding and cut down on their less profitable division s.

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Sony used to be one of the biggest names in the U.S. electronics industry. Wondering why they pulled back so much, when name recognition alone would drive an insane amount of phone sales.