Sony image sensor and smartphone sales take a hit

by: Robert TriggsJanuary 29, 2016


It’s no secret that Sony has been struggling to make a breakthrough in the smartphone market in the last year or so, but its slowing handset sales have previously been offset by its other stronger business segments. However, the company’s latest quarterly financial results reveal that even Sony’s historically strong image sensor division is feeling the strain from the competitive smartphone market.

Overall though, Sony is making more money this year, net profit grew 33 percent over the year to reach ¥120.1 billion ($1 billion). While sales revenue remained mostly flat at ¥2.58 trillion ($21.5 billion) for the quarter, operating profits grew by 11 percent to ¥202.1 billion ($1.69 billion), following some strong growth in the company’s gaming and movie divisions.

We’re most interested in Sony’s mobile unit, which didn’t perform quite so well in terms of sales. Revenue fell by 14.7 percent year-on-year, as a result of poor smartphone sales and a “strategic decision not to pursue scale”. It seems that the release of Sony’s latest Xperia Z5 flagship line has done little to improve the company’s struggling smartphone presence. Sony has been making major efforts to cut division costs though, both in the research and marketing department. As such, operating income increased from ¥10.4 billion ($86 million) to ¥24.1 billion ($199 million) over the year.

Perhaps more worryingly for Sony, sales revenue from its more lucrative image sensor business have also declined over the past year. Operating revenue from Sony’s device division, which includes the company’s battery and imaging components, fell by 12.6 percent year-on-year, as demand for smartphone sensor components dropped “significantly” in the quarter. Not only was this figure hurt by Sony’s falling smartphone shipments, but the company also saw sales to external customers drop by 7.5 percent. Sony’s Exmor range of image sensors had been proving popular with smartphone manufacturers around the world, especially in the high-end market.

sony logo mwc 2015 3See also: Sony closes $155 million purchase of Toshiba’s image sensor business5

Sony has also been pumping cash into additional research and development projects for image sensors and camera modules, in order to stay ahead of competition. Combined, this led the division to switch from a ¥53.8 billion ($445 million) profit in Q3 2014 to a ¥11.7 billion ($97 million) loss in the same quarter during 2015.

Other Sony divisions have fared much better, with PlayStation 4 gaming revenue up 10.5 percent and Sony Picture box office revenue increasing by 26.9 percent. However, Sony is yet another large electronics company struggling to eke out profits from the competitive smartphone market.

  • xoj_21

    sensors took a hit due they invest alot of money is research if they stay ahead this will help them in the future, sony problem in smartphones have more to do cameras are not in par with apple samung or even LG, their sensors are best but their software its up to task.
    i love their design but OLED and OIS and good chip like wolfson are a must.

    • Ichibanmugen

      Their hardware build quality is top notch, their designs however are getting old and less appealing to people. the prices are also higher than the average. If they solve these things and market their devices better I’m sure we’ll be seeing more happy faces.

      Software wise I can’t say much though.

      • Osakwe tochukwu

        Guess the 4k and ip67 feature didnt save sony mobile division. Sony needs to chhange their phone design its getting boring like u said

        • Ichibanmugen

          The way the 4K display is currently setup is like a gimmick, ip67 is very useful but I bet most people don’t even understand what ip67 means. they just blindly go for Samsung or Apple anyways. It’s a Samsung phone not “Android” market here is so saturated but people still don’t know the difference between samsung or android. even though Samsung runs Android. so they won’t buy HTC, LG, Sony or whatever phone.

          I’m kind of waiting for Xiaomi to set foot here in Europe, with their prices I bet many will switch over to Xiaomi brand or any other Chinese OEM like Xiaomi or Meizu or BLU or whatever. Huawei is still high priced here.

          • Osakwe tochukwu

            Well im pretty sure when those chinese oems climb the ladder to the spot samsung or apple is occupying currently they would behave in the same manner. Right now they are still looking for recognition and once they get it we will see their true colors. Our of all the oems u mentioned above i think meizu is the only one that trickles ma fancy. I love their devices but cant get it around this part of the world.

        • Peter

          It’s not hardware, it’s software.

          I honestly think that days of OEM Flagships are over. Why would people choose Sony or HTC and a skinned version of Android with updates after 9 months over an iPhone or Nexus with pure OS and quick updates?

          • Osakwe tochukwu

            Well oems will be forced to make their updates quicker if it becomes a real deal breaker. That i know for sure

          • Svnjay

            Because stock Android sucks.

  • I wonder if this is due to Samsung supposedly using their own sensor technology in the S7 & Note 6 which will kill orders from Sony?

  • Akshay

    Z5 is performing better than previous models lets hope d same with Z6

  • I am always surprised at the hit Sony mobile phones get. I use Sony my wife uses Samsung, the Sony is much much more robust and has survived falls from a motorcycle at 70 kph. The camera is rather good and it is a quality music device. It works as a phone as well…