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05-18-2019, 07:06 AM   #1
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Sony - 2% YOY growth for its 'Imaging Products and Solutions' Division

Sony's financial report shows 2% YOY growth for its 'Imaging Products and Solutions' division: Digital Photography Review

Its not all doom and gloom in the industry.

05-18-2019, 07:55 AM   #2
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Sony has been aggressive in its release of new products, 9 lenses in 2017 & 2018, and 4 new e mount cameras. They have probably over a dozen e mount cameras that are still available new at a wide range of price points, so flooding the market seems to work for them. Sigma has also put out a plethora of e mount lenses, which no doubt adds a little to Sony camera sales.
05-18-2019, 09:04 AM   #3
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What's their profit margin?

It's always nice to have the big picture. But you can't count on the marketing department to give you that. You could call this a release intended to produce confidence in the company among prospective customers. I'm not sure it has any other value.

The big question is, does the increase in sales on higher value items cover their R&D expenditures for such items? Increasing market share is a good thing or abad thing depending on what it cost to achieve it.

Last edited by normhead; 05-18-2019 at 09:09 AM.
05-18-2019, 12:12 PM   #4
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Sony's traditional markets (TVs & HIFIs) are likely suffering. There's a lot more competition with TVs and nobody seems to be buying HIFI today unless it's a no brand Bluetooth speaker. Their headphones (Bluetooth again) are pretty popular and they may have products I'm not aware of, but it may be their photo side is one of few growth areas.

05-18-2019, 02:20 PM - 2 Likes   #5
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Ooh, not so fast, Winder!

Mistral75 has shown with his analysis of the various companies that it's with good reason that stat - the whole year - has been served up, it's to hide the trend.

Here is the most recent quarter performance, and those Sony products have resulted in falling sales and interest, not plus two percent but minus 7 percent as a matter of fact:

05-18-2019, 03:54 PM - 1 Like   #6
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For Sony \ Imaging Products and Solutions \ Still and Video Cameras the year-on-year growth (FY2018 compared to FY2017) was +1.5%:
  • Q1 (April-June): +7%
  • Q2 (July-September): +3.7%
  • Q3 (October-December): +1.3%
  • Q4 (January-March): -7.3%

During the same period CIPA shipments (cameras + lenses, ) went down 8.3%:
  • Q1: -3.6%
  • Q2: -7.8%
  • Q3: -3.5%
  • Q4: -20.7%

Sony \ Imaging Products and Solutions is profitable: FY2018 operating income was 84bn (12.5% of sales), an increase of 12.1% in comparison to FY2017 (+16.4% at constant exchange rates).

Sources: https://www.sony.net/SonyInfo/IR/library/presen/er/pdf/18q4_supplement.pdf page #4, CIPA - Camera & Imaging Products Association: Digital Cameras for CIPA camera data and CIPA - Camera & Imaging Products Association: Interchangeable Lens for CIPA lens data.
05-19-2019, 01:53 AM   #7
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Sony Q4 profitability compared to the year before dropped like a rock -73%

QuoteOriginally posted by Mistral75 Quote
For Sony \ Imaging Products and Solutions \ Still and Video Cameras the year-on-year growth (FY2018 compared to FY2017) was +1.5%:
  • Q1 (April-June): +7%
  • Q2 (July-September): +3.7%
  • Q3 (October-December): +1.3%
  • Q4 (January-March): -7.3%
The sharp decrease in Sony sales over time happened at the time when both Canon and Nikon began to sell competing products (the last quarter). So Q4 is much more representative of the future than anything else.
Sony Q4 profitability compared to the year before dropped like a rock -73% (Mirrorless and DSLR dinosaur collapse cont'd: Sony Q4 camera profits dropped by -73% - PentaxForums.com). Sony's performance here was pretty much exactly the same as Canon's.

The bad omen for Sony is not only that the profits evaporate quickly but that this is happening after lots of efforts to raise prices and focussing on expensive gear instead of users friendly beginner offerings.

If Sony is unable to sustain profitability with it super-pricey product mix only just because they do encounter some beginning competition (and that will surely get stronger quickly) then they have more than a small problem.

It comes in handy that they now chose to hide camera performance in a big mix consumer gadget division: Sony merges mobile, TV, audio, and camera divisions into one - Gizmochina

I do expect that this next 12 months we'll see much more telling results from all makers.

With suddenly some real comparable and replaceable products from Panasonic, Canon, Sony, Nikon in that market segment the profits of the past will surely be gone forever.
05-19-2019, 02:24 AM   #8
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I'm guessing that even Sony is going to have to slow new releases.

I also think that their pattern of having their cheap cameras be really ancient cameras that they have just kept around and lowered prices on may catch up to them as Canon releases cheap full frame MILCs that are quite a bit newer than the A7.

05-19-2019, 02:31 AM   #9
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QuoteOriginally posted by johnha Quote
Sony's traditional markets (TVs & HIFIs) are likely suffering. There's a lot more competition with TVs and nobody seems to be buying HIFI today unless it's a no brand Bluetooth speaker. Their headphones (Bluetooth again) are pretty popular and they may have products I'm not aware of, but it may be their photo side is one of few growth areas.
Real HiFi is a more rarefied market than even DSLRs.
Those who are buying, are not buying Sony.
05-19-2019, 06:05 AM   #10
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QuoteOriginally posted by Rondec Quote
I'm guessing that even Sony is going to have to slow new releases.

I also think that their pattern of having their cheap cameras be really ancient cameras that they have just kept around and lowered prices on may catch up to them as Canon releases cheap full frame MILCs that are quite a bit newer than the A7.
Not all markets can afford the latest and greatest. I was talking to guy who teaches photography in Atlanta and his school just bought a bunch of A7II bodies at a discounted rate for students to use. They have a boat load of adapters to use just about any lens from any system. There is still a market for these cameras and I would guess that Sony still has inventory to move. In many ways the A7II is still a better camera than the Canon RP.
05-19-2019, 06:23 AM   #11
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QuoteOriginally posted by beholder3 Quote
The sharp decrease in Sony sales over time happened at the time when both Canon and Nikon began to sell competing products (the last quarter). So Q4 is much more representative of the future than anything else.
Sony Q4 profitability compared to the year before dropped like a rock -73% (Mirrorless and DSLR dinosaur collapse cont'd: Sony Q4 camera profits dropped by -73% - PentaxForums.com). Sony's performance here was pretty much exactly the same as Canon's.

(...)
I wouldn't draw too many conclusions from a single quarter, which is year after year the weakest of all (January-March, after the Christmas sales) and was particularly weak for everybody this year (save for Ricoh Imaging thanks to the release of the GR III) with a 20.7% decrease in shipments according to CIPA, thus showing that retailers had too much inventory remaining after Christmas.

By the way, Canon and Nikon began to sell competing products in Q3 (September-December), not Q4: September for Nikon Z7, October for Canon EOS R and November for Nikon Z6. Yet Sony Imaging Products and Solutions' Q3 was the strongest of FY2018: highest quarterly growth in operating income (+31.8%) and highest quarterly operating income (34.2bn).

The whole sequence of Imaging Products and Solutions' quarterly operating incomes is as follows:
  1. Q1: +12.4% (from 23.2bn to 26.1bn)
  2. Q2: +15.6% (from 18.9bn to 21.8bn)
  3. Q3: +31.8% (from 26.0bn to 34.2bn)
  4. Q4: -73.2% (from 6.9bn to 1.8bn)

QuoteOriginally posted by beholder3 Quote
(...)

It comes in handy that they now chose to hide camera performance in a big mix consumer gadget division: Sony merges mobile, TV, audio, and camera divisions into one - Gizmochina

(...)
it's actually the (very negative) mobile phone performance that Sony chose to hide in a big consumer division, not the camera performance.
05-19-2019, 07:11 AM   #12
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QuoteOriginally posted by Mistral75 Quote
Yet Sony Imaging Products and Solutions' Q3 was the strongest of FY2018: highest quarterly growth in operating income (+31.8%) and highest quarterly operating income (34.2bn)
Another bad quarter and their Q3 will be old news really quick.
Q4 essentially wiped out all the gains made all year.

It doesn't really matter when Nikon and Canon mirrorless were released. What matters is when consumer adoption got serious. The Q4 result are an indication that they may hit Sony really hard. But such things are best noted at the end of the year. But if you graph those numbers and project..... even using yearly numbers....

You can only spend so much time putting lipstick on a pig.

Last edited by normhead; 05-19-2019 at 07:18 AM.
05-19-2019, 07:40 AM - 1 Like   #13
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QuoteOriginally posted by normhead Quote
(...)
Q4 essentially wiped out all the gains made all year.

(...)
It did not: even with Q4 as it was, FY2018 operating income showed a 12.1% increase over FY2017 operating income (84.0bn vs 74.9bn).

That's a 12.5% profitability (operating income sales) in FY2018, which is not bad at all.

QuoteOriginally posted by normhead Quote
(...)

It doesn't really matter when Nikon and Canon mirrorless were released. What matters is when consumer adoption got serious. The Q4 result are an indication that they may hit Sony really hard. (...)
Canon and Nikon were hit even harder than Sony in Q4 of FY2018: Sony sales went down 7.3%, Nikon sales down 21.3% and Canon sales down 23.0%.

As for the operating income, Sony's went down 73.2% and Canon's down 81.6%. Nikon's went up, from slightly negative (-2% of sales) to symbolically positive (0.2% of sales).
05-19-2019, 07:45 AM - 2 Likes   #14
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QuoteOriginally posted by Mistral75 Quote
It did not: even with Q4 as it was, FY2018 operating income showed a 12.1% increase over FY2017 operating income (84.0bn vs 74.9bn).



Canon and Nikon were hit even harder than Sony in Q4 of FY2018: Sony sales went down 7.3%, Nikon sales down 21.3% and Canon sales down 23.0%.

As for the operating income, Sony's went down 73.2% and Canon's down 81.6%. Nikon's went up, from slightly negative (-2% of sales) to symbolically positive (0.2% of sales).
You're wasting your time. People are going to believe what they want to believe and no amount of documentation or facts will change that.


"Never underestimate the difficulty of changing false beliefs by facts" economist Henry Rosovsky
05-19-2019, 07:58 AM   #15
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QuoteOriginally posted by Mistral75 Quote
I wouldn't draw too many conclusions from a single quarter
Let's face it, it is the most recent quarter reported in a rapidly changing market. So previous figures are mostly irrelevant until we get new quarterly figures which show that the last one was an anomaly. Highly unlikely. But we all can just wait and see - that is what the market as a whole is doing anyway.

And comparing a quarter against the previous year is more robust against anomalies than just comparing against the preceeding quarter.

---------- Post added 19th May 2019 at 17:05 ----------

QuoteOriginally posted by normhead Quote
You can only spend so much time putting lipstick on a pig.
It had to happen. And loosing somewhere between 1/4 and 1/3 of the previously monopoly market to competition in one quarter simply had to have serious effects on Sony.

The really interesting thing here is, what really is the reason behind Sony's -73% drop in profitability? Too much fixed marketing costs compared to sales? Buyers moving to the lower end models?

Last edited by beholder3; 05-19-2019 at 08:06 AM.
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