Sony's losing lots of money on smartphones

[s44]

http://www.engadget.com/2014/09/17/sony-losses-quadruple/

As an American I want to think it's because they've completely ignored the US flagship market, but it probably has more to do with their push to cover every single price point with a device. On the other hand, Samsung does that and makes piles of cash, so... maybe it's because they ignored our flagship market.

 

[Red Storm]

I want to say it's because they ignored the US market, but there are Chinese phone OEMs making good money just in China, so I think it's just Sony being incompetent.

 

[isekii]

yea ~ how long did it take them to put out a flagship on any of the carriers ?

I think Z1 came out on t-mobile like a year after it was released. Z1S came out a bit quicker but I dont think it was much of an improvement or change from the Z1.

 

[gorcorps]

Sony makes okay devices, but with zero advertising that I've seen the general public doesn't know if they have a galaxy s5 equivalent or not. Nobody I know even thinks of Sony when they're looking at phones because they don't know if they have new ones or not.

 

[vi edit]

As far as I know, the only product Sony makes any more is the Playstation. I don't think they make anything else. Or at least that is what the TV tells me.

 

[luv2liv]

ok dumb question: why doesnt sony sell their phones to all the carriers in all the countries? just look at apple's success and copy it.

ps. most non-tech people i know dont even know Sony makes phones!

 

[Suspicious-Teach8788]

Sony does pretty well in Europe and Asia. The US market isn't really the best metric for how well a company is known given that we rely on carrier subsidies and partnerships to make that happen.

Pre-touchscreen smartphones, Sony Ericsson phones were THE phones to use. Remember the W810, K850, etc? I swear everyone had those in Hong Kong.

 

[s44]

ok dumb question: why doesnt sony sell their phones to all the carriers in all the countries? just look at apple's success and copy it.

Other countries require distribution, support, blah blah, but the US is even harder. Carriers here want exclusives. It wasn't until the freakin' Galaxy S3 that the same device got released on all four carriers! (Apple was on three carriers with the 4S, four with the 5, but only late.) HTC finally followed suit with the original One (which had major delays on VZ anyway), and even LG got dicked around by Verizon (had to change the body, cases for non-VZ models don't fit!) on the G2 before only having some minor color/logo changes forced on the G3. And remember how the X launch last year was destroyed by Moto Maker being AT&T exclusive?

So as you see, it's only in the last year year that it's become regular for the same device to be everywhere at about the same time. Now, why Sony isn't bringing its Z3 and Z3c to all the carriers... that's another question. Historically they've shied away from CDMA (VZ and Sprint), but given that they're using Qualcomm guts this year like most other OEMS, you'd think it wouldn't be an issue.

 

[Insomniator]

What does Sony make money on? I feel like they post a billion dollar loss every quarter.

I don't know if I've ever seen a Sony phone in person, I don't know why they wouldn't just team up with a carrier and get them in the US. Sony is a powerful name over here... if LG can survive I'm sure Sony could.

 

[isekii]

What does Sony make money on? I feel like they post a billion dollar loss every quarter.

I don't know if I've ever seen a Sony phone in person, I don't know why they wouldn't just team up with a carrier and get them in the US. Sony is a powerful name over here... if LG can survive I'm sure Sony could.

They did release several phones with t-mobile. Z1 Z1S but these cost close to as much as a GS5 and HTC M8.
If you were going to pay that much, would to get the Sony or the GS5/HTC ?

 

[bearxor]

The first cell phone I owned was a Sony phone. A Z100 on SprintPCS's just launched Houston network. Amazing phone that I loved to death.

The issue is that I think Sony hasn't made good phone until the past couple of years and they've been poorly represented in the US market. It's kind of weird to think that although the US market is pretty tiny compared to the rest of the world, what happens here has a rippling effect. They need an outstanding flagship at a great price here and the marketing backing to make people know it.

 

[PowerYoga]

As far as I know, the only product Sony makes any more is the Playstation. I don't think they make anything else. Or at least that is what the TV tells me.

They make good TVs and a bunch of other electronics. Their smartphones are meh at best.

 

[vi edit]

They make good TVs and a bunch of other electronics. Their smartphones are meh at best.

I know. I own a Bravia TV and a RX-100 camera. Two very nice products, if not the best in their respective categories. It's just that there is *zero* marketing for them.

 

[s44]

Sony does pretty well in Europe and Asia. The US market isn't really the best metric for how well a company is known given that we rely on carrier subsidies and partnerships to make that happen.

Pre-touchscreen smartphones, Sony Ericsson phones were THE phones to use. Remember the W810, K850, etc? I swear everyone had those in Hong Kong.

I had SE dumbphones myself. Loved 'em.

But honestly, they *aren't* doing well in Europe and Asia. Hence these losses! AFAIK they're known for their budget/midrange brands in Europe, which are getting stomped by encroaching superbudgets, Moto, etc. And this is why I say they should be playing with a US flagship: without a halo product to brand their phone experience, they can't differentiate themselves to sell except on value. And the press/tech meme circulators are pretty weighted to the US.

 

[poofyhairguy]

When I was in China recently I saw a ton of Sony phones. Its like they don't exist in the states.

 

[isekii]

one of my fav was the T28i

 

[holden j caufield]

I don't know anyone with sony phone.

 

[maxi007]

As far as I know, the only product Sony makes any more is the Playstation. I don't think they make anything else. Or at least that is what the TV tells me.

i don't think so, before buying any phone , 1st i look at sony's phone.
they knows their product will make market ,no need to over advertise like samsung .
their music devices are best always

 

[AznAnarchy99]

Sony does pretty well in Europe and Asia. The US market isn't really the best metric for how well a company is known given that we rely on carrier subsidies and partnerships to make that happen.

Pre-touchscreen smartphones, Sony Ericsson phones were THE phones to use. Remember the W810, K850, etc? I swear everyone had those in Hong Kong.

I had one here in the US. It was an amazing phone and people were jealous when they saw it. Hell the k850 was much better than the 1G iPhone.

 

[Dari]

Great engineers and designers. Terrible management.

 

[Deeko]

It's a shame - I love my Z1 Compact. Too bad their marketing and sales team is terrible.

 

[Gunbuster]

I know how to save Sony. What if they invented a rolling dancing speaker robot? Oh wait...

 

[ponyo]

I knew the previous mobile unit sales forecast was too optimistic. The CEO has been over promising and under delivering for the past two years. So the news didn't surprise me. Sony was struggling when I bought the shares back in late May. They're still struggling. There was similar bad news and downward revision back in June. What surprised me about this announcement was the amount of the loss and the suspension of the dividend. The loss was LOT bigger than I was expecting. And I didn't think they would eliminate the dividend. I felt it could be cut but not eliminated. I bought the shares partially for the dividend. I was willing to wait for the turnaround while collecting some kind of dividend. Anything is better than basically 0% the banks are paying. But now the dividend is gone so shareholders are going to be little less patient.

I feel like this is clear the deck and start over type of news. It's better to clean house and set the bar really low than keep lowering it. This about the lowest it can get IMO. The only bad thing is Sony and the CEO has lost all credibility with the investment community and Wall St for the quarter after quarter of missed expectations. You can't keep promising turnaround and better performance and then fail to deliver quarter after quarter like Sony has for the past two years under this CEO.

But I'm sticking around. I feel like things are changing for the better. I feel the Xperia line is finally coming into its own. Xperia Z3 is the first Sony phone I would consider. In the past, I felt every Xperia product was vastly inferior to the competition and never considered purchasing one. But now, Xperia Z3, Z3 compact, and the Xperia tablets are all products I feel is good enough to compete. Sony just needs to get the products out there and advertise. I think Z3 is the turning point and start of great and competitive Android product line. I expect class leading device for Z4.

Today news was bad but the stock is still up almost $3 or 18% from the last bad news back in June. So unless it drops below my buy in price of ~$16, I feel like the any bad news is already priced in the stock.

 

[Zaap]

I realize not only don't know anyone who owns a Sony phone, I've never even seen one in the wild.

 

[Dari]

I knew the previous mobile unit sales forecast was too optimistic. The CEO has been over promising and under delivering for the past two years. So the news didn't surprise me. Sony was struggling when I bought the shares back in late May. They're still struggling. There was similar bad news and downward revision back in June. What surprised me about this announcement was the amount of the loss and the suspension of the dividend. The loss was LOT bigger than I was expecting. And I didn't think they would eliminate the dividend. I felt it could be cut but not eliminated. I bought the shares partially for the dividend. I was willing to wait for the turnaround while collecting some kind of dividend. Anything is better than basically 0% the banks are paying. But now the dividend is gone so shareholders are going to be little less patient.

I feel like this is clear the deck and start over type of news. It's better to clean house and set the bar really low than keep lowering it. This about the lowest it can get IMO. The only bad thing is Sony and the CEO has lost all credibility with the investment community and Wall St for the quarter after quarter of missed expectations. You can't keep promising turnaround and better performance and then fail to deliver quarter after quarter like Sony has for the past two years under this CEO.

But I'm sticking around. I feel like things are changing for the better. I feel the Xperia line is finally coming into its own. Xperia Z3 is the first Sony phone I would consider. In the past, I felt every Xperia product was vastly inferior to the competition and never considered purchasing one. But now, Xperia Z3, Z3 compact, and the Xperia tablets are all products I feel is good enough to compete. Sony just needs to get the products out there and advertise. I think Z3 is the turning point and start of great and competitive Android product line. I expect class leading device for Z4.

Today news was bad but the stock is still up almost $3 or 18% from the last bad news back in June. So unless it drops below my buy in price of ~$16, I feel like the any bad news is already priced in the stock.

I see you still have faith but I've lost it with them. Last year I emailed them about their phone strategy and how they don't sell in America. Their only retort was to point me to their website and send me a free Xperia Z Ultra. I declined. A year later and all signs point to a global slowdown in the growth-rate of phones. Considering how fierce the segment is I don't see how SONY can do better than its competitors. They've completely missed the boat , scale-wise. Their only upshot is that their smartphone cameras are in demand. So is Japan Display. But, other than that, it'll be interesting to see where they go from here.