Sony has published full financial results for its third fiscal quarter (Q4 for everyone else), and things are looking pretty flat for the Japanese tech giant. Overall, the company made just over $1 billion USD in profit in the three months ending on December 31, 2015. Sony saw a significant increase in PS4 software sales, and in its motion picture department. Sadly, a substantial decline in smartphone sales means the company as a whole only increased its revenue by 0.5% on the same quarter a year ago…
Sony’s smartphone business brought in $3.2 billion in sales, and made the company $201 million in profit. Sales decreased by almost 15% year-on-year due to a ‘significant decrease in smartphone unit sales’, following the company’s decision to release fewer smartphones and spend less on developing and marketing them. Although revenue was down, profit climbed 133%, suggesting the new strategy is sort-of working for Sony.
In Sony’s own words:
Operating income increased 13.8 billion yen year-on-year to 24.1 billion yen (201 million U.S. dollars). This significant increase was primarily due to an improvement in product mix reflecting a shift to high value-added models, as well as reductions in costs including marketing, research and development and other selling, general and administrative expenses, partially offset by the above-mentioned decrease in smartphone unit sales and the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs. During the current quarter, there was an 18.8 billion yen negative impact from foreign exchange rate fluctuations.
Sony’s change in focus obviously resulted in selling fewer phones, and in generating lower revenue. But the silver lining is that the company’s mobile division made much more profit as a result.
As Sony plans to release its Xperia Z5 range in the US, the question must be asked as to what the long term view is for the once-giant of the mobile industry. Will it continue operating the way it has done and accept a small slice of market share in return for better profit margins? Or, will it jump in on the ‘premium specs at an affordable price’ bandwagon?