Sony’s corporate makeover starts to pay off. Despite weak demand for its digital cameras, video cameras and televisions, Sony books the first annual net profit in five years. While Sony’s jump back into the black was largely due to the depreciation of the yen inflating the value of foreign income and a string of asset sales, the Japanese electronics giant nevertheless managed to turn the corner on several fronts. Painful restructuring starts to bear fruit. Even though it’s not the camera business that pushes the former consumer electronics powerhouse back into profit zone, Sony has found some success with high-end cameras with interchangeable lenses for photography buffs. Sony’s imaging future is all about this market.
Don’t forget, Sony’s net profit also includes the selling of its silverware, a.k.a the sale of the Manhattan headquarters and chemical division while Sony invested some 500 million dollars in camera and medical equipment maker Olympus as part of a drive to tap the lucrative medical equipment market. Although better known for its cameras, Olympus controls about 70% of the global market for medical endoscopes and thereby provides Sony with a nice financial cushion.
Now Sony is aiming for a 16% rise in net profit for the current fiscal year that ends in March 2014. That’s something other camera makers can only dream of given the fiercely competitive electronics landscape. Now for Sony there is light at the end of the tunnel. In the imaging division Sony has implemented investments for growth such as expanding production capacity for its cutting-edge and competitive CMOS image sensors. And according to strategy papers Sony will focus on the high-end imaging market by strengthening its core business digital imaging. Excerpt from Sony’s strategy paper that the 2012/13 fiscal report refers to:
Sony is reinforcing its development of image sensors, signal processing technologies, lenses and other key digital imaging technologies in which it excels, and plans to leverage these technologies in both its consumer products (such as compact digital still cameras, digital video cameras and interchangeable lens digital cameras) and broadcast and professional products (such as professional use cameras and security cameras) in order to further strengthen and differentiate Sony’s overall product line. The Company also plans to extend the use of these key technologies across a wide range of business applications, from security to medical, to further expand the scope of its digital imaging business. Sony will target total sales of 1.5 trillion yen and double-digit operating income margin from the consumer, professional and image sensor businesses by FY14.
Slightly different wording, yet still the most recent corporate strategy:
In digital imaging, Sony will further strengthen the development of proprietary technology in image sensors, signal processing technology, lenses and other fields in which it excels. Particularly in image sensors, Sony has consistently invested resources in this strategically important area and will continue to do so as it strives to reinforce technical differentiation and bolster sales in such high-growth areas as smartphones. Furthermore, by leveraging these unique technologies in consumer products as well as a broad range of professional products, including security, professional-use camera and medical equipment, Sony aims to further expand the scope of the digital imaging business and create attractive and differentiated products.
Sony believes that it can maintain its high market share in the digital camera and digital video camera markets and generate stable profits in these categories. Meanwhile, the market for interchangeable lens digital cameras is expanding, and Sony´s goal is to leverage its unique technologies as it targets sales growth exceeding the market growth rate to build profitability.
According to well informed Sony Alpha Rumors Sony recently reworked the imaging business roadmap substantially. Expect larger sensor cameras to play the dominant role in the future of an ambitious strategy.
2014 it will be for Sony, and honestly, especially if you’re new to the market and about to decide on a camera system, NEX and Alpha are tempting, not only because of state-of-the-art technology, but especially because the Alpha and NEX lineups provide absolute quality glass with Sony’s licensing of Carl Zeiss lenses. And maybe even the Hasselblad joint venture is up for something promising in the future.
If I buy a camera, I first have a look at the available lenses, then the sensor — two areas where Sony shines.
I have not the slightest doubt in my mind that in the longer run Sony might very well outshine lethargic Canon and Nikon.