It's no secret that Sony's smartphone business is in shambles. The company has been consistently seeing a downward trend in sales numbers over the last couple of years. However, its financial report for the third fiscal quarter (October-December 2019) suggests fortunes are changing. The Japanese firm managed to sell 1.3 million smartphones during the three month period.
Those numbers may not look really impressive when you realize that Samsung and Huawei shipped 68.8 million and 56.0 million smartphones respectively during the same period. However, the numbers aren't that bad as far as Sony is concerned.
To put that into perspective, the company had sold just about 600,000 smartphones in the previous quarter. Now that's a more than two-fold increase in quarter-on-quarter sales numbers.
Sony smartphones selling well, gaming business saw profit fall
Sony saw a 20 percent decline in profits during the last three months of 2019. The company's operating profits dropped to 300 billion yen (around $2.73 billion) from 377 billion yen (~$3.43 billion) a year earlier.
The figures for last year, however, include the one-off accounting gain linked to the acquisition of music publisher EMI. Excluding that, the profit would actually be about six percent up.
Along with smartphones, Sony says demand for image sensors has been strong during the quarter. The same reflected in the company's financial report as well.
During the October-December 2019 period, the profit from sensor business went up by 62 percent to 75.2 billion yen (~$684 million). Sony supplies image sensors to some of the biggest names in the smartphone industry, including Apple and Huawei.
This strong show from smartphone and image sensor businesses was somewhat undone by Sony's gaming business, though. Declining sales of its six-year-old PlayStation 4 console means profit fall 27 percent to 53.5 billion yen (~$487 million) during the last three months of 2019. The Tokyo-headquartered company has the PlayStation 5 scheduled for release later this year.
Going forward, Sony expects its annual operating profit to increase by about five percent to 880 billion yen (~$8.1 billion).
The company's share price has increased by more than 40 percent over the past year. So that adds to the confidence as well.
The company, however, is concerned that the spread of the coronavirus may impact its global supply chain. Sony's image sensor business would be hit severely if its clients suspend their assembly plants in China for a prolonged period.
"We can't deny the possibility of the virus threat expanding to a scale large enough to wipe out our latest upward earnings revision," said Hiroki Totoki, Chief Financial Officer at Sony.