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12-08-2016, 07:50 AM   #1
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Sony financial results - A7 etc. camera collapse with interesting insights

When looking at Sony's recent fiancial results: https://www.sony.net/SonyInfo/IR/library/fr/16q2_sonyspeech.pdf
which tell the same story of lack of success like Nikon recently showed, still there are some very interesting things going on.

So Sony sensor business is bleeding money with a loss. Not new. Probably they will need to sell that area sometime soon if they can not get more successful (or sucessful at all).

But the really intersting bit is the collapse in the camera business (recent forecasts versus previous year):
  • Sales (units) - down by -38%
  • Sales (money) - down by -18%
  • Operating Income - down by -51%
The first message here is that obviously a shift is there towards to more high price items as sales (money) is less down than units. Seemingly they still have some compacts selling and that is even less than last year, so the units drop of quickly. Much fewer cheap items, a little more expensive items.

But at the same time their operating income drops like a rock.

So either they have huge overhead costs which are not very variable or their high price items are anything but profitable and they actually made most profits with point and shoots. I do find this surprising.

One more year like this and Sony's camera business will be in the reds as well.
It would be sad to see Sony be doomed again.

12-08-2016, 08:01 AM   #2
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Could it be the drop of the operating income be mostly because the factory damage in the earthquake?
12-08-2016, 08:23 AM   #3
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Very curious, I always thought Sony's sensor business is a money maker.
12-08-2016, 08:40 AM   #4
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They have to increase prices for the sensors they are selling to Nikon and Pentax.

12-08-2016, 08:54 AM   #5
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QuoteOriginally posted by virusn3t Quote
Could it be the drop of the operating income be mostly because the factory damage in the earthquake?
You shouldn't let facts get in the way of a good story ...
12-08-2016, 01:54 PM   #6
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QuoteOriginally posted by virusn3t Quote
Could it be the drop of the operating income be mostly because the factory damage in the earthquake?
Thats what some conspiracy theorists will want to believe.
Only the plunge of OI is 36 billion yen and the impact of the earthquake ist quantified by Sony as 3 billion yen, so that is not even an excuse for 10% of the loss of profits.

They do have an issue with the profitability of their expensive products.
12-08-2016, 02:01 PM   #7
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QuoteOriginally posted by beholder3 Quote
Thats what some conspiracy theorists will want to believe.
Only the plunge of OI is 36 billion yen and the impact of the earthquake ist quantified by Sony as 3 billion yen, so that is not even an excuse for 10% of the loss of profits.

They do have an issue with the profitability of their expensive products.
3 Billion Yen impact on what? Only in building and machinery or that include delays in the payment of clients like Nikon, Pentax, and others (i dont think theyre the only customers, but i dont know the names of the other) i havent read the post, but they make any reference about profits not only income



12-08-2016, 03:03 PM   #8
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QuoteOriginally posted by FantasticMrFox Quote
Very curious, I always thought Sony's sensor business is a money maker.
Yeah, me too...
Regarding sensor, they are supplying half the known world... how they could be losing money is beyond me...

Regarding cameras, they have churned out some impressive models, some are very expensive, and people seem to be buying those a lot.

I would not buy a Sony, but I'm enjoying the Sony sensor in my K-01... their quality, Pentax's superior interface
12-08-2016, 03:34 PM   #9
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QuoteOriginally posted by beholder3 Quote
But at the same time their operating income drops like a rock.
That is what you get for over-saturating the market and having a stranglehold on sensor production.


QuoteOriginally posted by RonHendriks1966 Quote
They have to increase prices for the sensors they are selling to Nikon and Pentax.
That would be one way to recover the deficit, however it wouldn't be sustainable. If prices go up by too much manufacturers will look elsewhere, and there are plenty of options.
12-08-2016, 04:15 PM - 1 Like   #10
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Mirrorless hasn't saved Sony, any more than it did Samsung with their NX series.

They destroyed their A mount in order to go E mount, got a one-off surge from the novelty of mirrorless, but their losses now parallel those of Canon and Nikon. By the way, for those blaming earthquakes, as far as I know they have suffered declining sales every year since the A7 series came out, and have responded by jacking up prices of everything, trying to evolve from a high volume, low profit brand to a premium one.

Pentax may have been the only DSLR manufacturer to experience growth this year, but I would think that also a one-off surge from the release of the K-1.

Most of its buyers (like me) were existing Pentax owners upgrading.
12-08-2016, 07:09 PM - 1 Like   #11
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The number of people slinging DSLRs outside have dropped significantly here in Asia.
Especially so the lower end models.

I believe a consolidation of the camera market will take place in the near future (like 5yrs) and companies will move back to slower launch cycles and the higher end market.

Seems like the China makers are inching into the camera business as well with XiaoMi coming out with a u4/3 camera and various fast aperture manual lenses from others.
Lower cost of manufacture and a disregard of existing norms/standards/(maybe even patents) may be the way the China makers eventually move in more and more.
History may well repeat itself just like how the Japanese eventually pushed out the German makers for cameras.

It has already happened with handphones (esp the non-Us market).
12-09-2016, 03:59 AM   #12
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I looked at the reports, but have no idea what the different things in it mean. But my understanding was that cameras and sensors were made by two different divisions in Sony. Raising prices on sensors would help Sony as a whole, but could actually make the camera division look worse. If the camera division isn't doing so well, it has more to do with the market for ILCs (including mirrorless options) cooling off, than anything to do with sensors and sensor production.
12-09-2016, 04:06 AM   #13
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Is there any Ricoh results (esp Pentax division) ?
12-09-2016, 04:20 AM   #14
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QuoteOriginally posted by virusn3t Quote
3 Billion Yen impact on what? Only in building and machinery or that include delays in the payment of clients like Nikon, Pentax, and others (i dont think theyre the only customers, but i dont know the names of the other) i havent read the post, but they make any reference about profits not only income
Their statement is explicit enough and includes all aspects:

QuoteOriginally posted by Sony:
The negative impact on operating income from the Kumamoto Earthquakes is estimated to have been approximately 3 billion yen
If they saw any chance in finding a good apology for the poor camera division performance in the earthquake they would. So it is fair to assume even the 3 billion is a stretched excuse.

That compares to -35.3 billion yen forecast drop in operating income (half of all their profits gone now), while monetary sales volume figures dropped by much less.
12-09-2016, 05:13 AM   #15
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QuoteOriginally posted by redcat Quote
Is there any Ricoh results (esp Pentax division) ?
Yeah, someone posted some a while back.

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