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Sony Reports Operating Loss For Q2, Great PS4 Performance Softens The Blow

October 31, 2014 - Written By Kristijan Lucic

Its not exactly a secret Sony isn’t doing all too well when it comes to smartphone sales which actually hurt the company altogether. The company has been facing losses for quite some time now and they’re constantly trying to find a way out of this mess. The had a relatively positive quarter 3 months ago, but that was it, the company is facing losses again for Q2. Sony has actually posted increased sales of $17.45 billion which is up 7.2% on a yearly basis, mainly thanks to PlayStation sales which are through the roof. Sony’s camera sensors are also going great so that definitely helped.

Sony did post a loss for Q2 though, operating loss of $785 million. This is a really bad result for the company considering their operating profit for the same quarter last year was $124 million. That loss was expected though, Sony is struggling to list their mobile business on its feet for a long time now, much like HTC. Sony shipped 9.9 million smartphones in Q2 which is just significantly less than this Japanese company shipped in the same quarter last year. Sony’s CFO even said that the company is leaving Chinese market recently, considering their sales over there were extremely poor. Sony is having a hard time pricing their smartphone in my humble opinion, they introduce low-mid range handset which sport great build quality and price them way too high. There are usually just as good offerings out there for half the price Sony prices their low-mid range handsets, especially in China. Sony also said that it will concentrate on high-end handsets and that it will increase its presence in US market.

Sony’s gaming division gained $2.8 billion in sales, which is up 83.2% year-on-year. The operating profit was just $200 million though. Sony moved 3.3 million PlayStation 4 gaming consoles during the quarter which actually increased the gap between PlayStation and Xbox. Sony’s division which produces image sensors earned $2.3 billion in revenue and posted an operating profit of $271 million, this was to be expected considering how many OEMs use Sony’s sensors when manufacturing smartphones. Sony’s cameras earned sony $1.6 billion in revenue though operating profit was only $184 million. TV department posted $2.6 billion in sales and $73 million in operating profit. Financial services are Sony’s most profitable business, the earned Sony $437 million in operating income.

It will be interesting to see what will Sony do next in order to revive their smartphone business. I don’t know how smart it is for the company to focus on high-end devices and leave Chinese market, but if they can’t lower the prices of their handsets in order to compete with the likes of Xiaomi and Meizu, I guess they don’t have that much of a choice. Do you think Sony will be able to raise from the ashes (as far as their smartphone business is concerned)?