Sony is bleeding money - business strategy discussion

Shifty Geezer said:
Are you completely oblivious to the contrariness here? Sony's devices make them money, yet you say Sony should abandon them. Rikimaru was sarcastically showing the error in your thinking. Then you argue in favour of MS staying in devices, while saying Sony should abandon them, even though Sony makes far more money from its devices than MS does.
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Correct me if i'm wrong



http://www.sony.net/SonyInfo/IR/financial/fr/14q4_sony.pdf

This states that Mobile Communications (cell phones) Lost another 220B yen more than even Financial Services made which is their biggest earner. Their Home and sound lines finally made a profit after many years in the red and that might be a one time bump up as 4k TV's are already hitting bargin basement pricing.


These aren't one time losses for sony , many of these deparments have been loosing money for years. With MS we really don't know how poorly xbox is doing but we certainly know Windows phone is bleeding badly. But the difference is MS makes billions each quarter even with windows phone doing poorly and xbox maybe doing poorly.

Sony's own guidance is a decrease in mobile sales , flat year on year for game and network services , image sales are going to decrease and lcd tvs are expecting to decrease.

If the rest of sony was pulling in billions a quarter in profit a year dispite these segments loosing or breaking even then maybe we could compare it to MS , but as it stands there is no reason too since they are not apple to apples comparisons.
 
Irrelevant arguments in the main. See DSoup's post above. Yes. Sony's mobile division isn't making lots of money (massive loss was due to good-will write-down). The rest are profitable. Even if the Imaging Division sales are going to decrease (based on what, BTW?), you don't throw away your Imaging Division just because there's a forecast decrease when that decreased revenue is still highly profitable. Heck, Surface has cost MS billions and, as I understand it, has only had a couple of profitable quarters. Of course, these aren't a blip but Sony's TVs are.

So why are you advocating that Sony gets rid of $450 million from its imaging (more than gaming, nearly as much as Pictures), $160 million from HE&S (40% of gaming), and $770 million from devices? Well, we all know the reason. The same reason that you said you thought nothing outside of PlayStation was selling well. The fact two Sony imaging sensors are in every iPhone sold doesn't count as 'selling well'. ;)

The moment you linked the financial report to show you'd looked up data, you really should have retracted your view and acknowledged that Sony's other divisions are worth keeping around.
 
eastmen said:
based on what ? At least read the link if your going to reply. Its based on sony's own guidance.
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Sony decided, rightly or wrongly, to try and turn around the Mobile Communications (MC) division rather than just axe it. Indeed this has been Sony's approach across the entire company but MC was the division with the most assets and day-to-day liabilities hence the considerable losses over the course of the entire year, although if you track their efforts on a quarterly basis it shows quite a turnaround even for MC.

Will MC be profitable next quarter? Maybe. Will be profitable over the full course of the next financial year? More than likely. How are Sony's other electronics divisions doing? Pretty good, actually. So why throw profits out of the window because of one division which Sony knew 18 months back would going to eat a ton of cash to try and salvage.

edit: typo.
 
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I assumed you didn't just mean that small reduction from 54.7 to 50 because it makes a mockery of the rest of your argument. You reckon Imaging should be axed but it's forecast to make more money than gaming, and its forecast reduction in operating income is lower than Gaming's. So you shoot yourself in the foot twice (or once in each foot). First you reckon the other divisions to Gaming don't sell - clearly false from your link. Second, you say Imaging is going to make less money next year as an argument for removing it, despite its income being more than Gaming and it's forecast being more positive than Gaming's.

Can you please, just once, admit you're way off the mark? Look at all the info, what you said, and see it's incoherent ramblings. Admit when you said you thought nothing but PS sells, you weren't basing that on anything, and you were evidently wrong - Sony's camera and video cameras do a reasonable business and make more money for them than Gaming does. Recognise that when you make the argument the other departments forecasts are reduced for next year, that you failed to apply that same logic to the Gaming Division which would see that as a more prime candidate for ditching that some of the other divisions.
 
Optical should go because of the changes in the optical market. They are becoming less and less important even in cell phones and they point and shoots are a fraction of the market they once were and decreasing yearly and even dslrs are decreasing in sales.

They should sell optical and focus on finance . They should even spin off the playstation line up. But at least that keeps them mind share.
 
Let's leave BR for a minute, I am still trying to comprehend why exactly Sony should sell imaging branch when it's:
a/ market leader
b/ makes them a lot of money

Should Apple sell their iPhone division too?
 
szymku said:
Let's leave BR for a minute, I am still trying to comprehend why exactly Sony should sell imaging branch when it's:
a/ market leader
b/ makes them a lot of money

Should Apple sell their iPhone division too?
Click to expand...

Yeah it makes no sense to me. Admittedly I'm a Sony whore when it comes to camera gear (got three of their camera's in my gear bag) but even putting that aside their sensors are used in their cameras, other companies cameras, videos cameras, other companies phones, high end movie cameras, you name it they are everywhere. They are becoming like Samsung where everyone runs to them for various parts for their products, in this case companies go to Sony for imaging sensors. Does anyone else even have the fab capacity to compete with them in that space? I just don't get why they would walk away from that when they are on such a profitable roll.
 
To be clear, Imaging covers cameras, and Devices includes sensors. A (crazy, nonsensical) call to close the Imaging division is independent from a call to stop producing and selling imaging sensors.
 
szymku said:
Let's leave BR for a minute, I am still trying to comprehend why exactly Sony should sell imaging branch when it's:
a/ market leader
b/ makes them a lot of money

Should Apple sell their iPhone division too?
Click to expand...
because the core markets for those sensors are drying up. Point and shoot , DSLR are down year over year. The only area of growth is in cell phones where camera's are becoming less of a selling point.
Even sony's own guidance is showing declines.
 
The only area of growth is in cell phones where camera's are becoming less of a selling point.
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That's untrue IMO. The cheaper Chinese manufacturers challenging the high end are all wanting Sony sensors. The only shrinkage is Samsung making in-house sensors to save costs (and necessitated by Sony being unable to meet demand). Plus imaging is more important than ever for things like multi-camera VR headsets, computer vision in cars, yada yada. Hence Sony predicting a 16.5% increase in Devices revenue and a 35% increase in Operating Income next year. In the same financials you link to above.

Additionally, assuming you see Windows mobile as a growth (you aren't recommending MS pull out of mobiles), there'll need to be two sensors (minimum) in every Windows phone sold to replace all these Android and iOS phones. That's a few billion sensors to be made and sold.
 
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If a human friendly (none headset, none eyestrain) 3D viewing system can be developed then you might actually be looking at 4 sensors per device. :p
 
eastmen said:
because the core markets for those sensors are drying up. Point and shoot , DSLR are down year over year. The only area of growth is in cell phones where camera's are becoming less of a selling point.
Even sony's own guidance is showing declines.
Click to expand...

Why do you think point and shoots and DSLRs are going down every year? Its because smartphones' cameras are getting better and better. The iphone 6 and Samsung s6 are both sporting sony sensors and Sony makes $20 off each iphone sold.
 
I'm trying to see a pattern among the chaotic arguments:
- Whatever is directly competing with microsoft should be a spin off or closed. Playstation, phones, tablets.
- Anything preventing MS from acheiving their "control of the livingroom" must be a spinoff or closed. Bluray, Playstation.
- Anything which would make Sony a supplier/licensor for microsoft must disappear. Sensors and bluray.
- If it's making a loss propose to close it immediately.
- If it's making money, say it's a downward trend. Fuck facts it doesn't matter.

Hence Sony should focus on financial services?
 
MrFox said:
I'm trying to see a pattern among the chaotic arguments:
- Whatever is directly competing with microsoft should be a spin off or closed. Playstation, phones, tablets.
- Anything preventing MS from acheiving their "control of the livingroom" must be a spinoff or closed. Bluray, Playstation.
- Anything which would make Sony a supplier/licensor for microsoft must disappear. Sensors and bluray.
- If it's making a loss propose to close it immediately.
- If it's making money, say it's a downward trend. Fuck facts it doesn't matter.

Hence Sony should focus on financial services?
Click to expand...
Sony should just give up the ghost and call it a day. Because trends, stats.
 
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