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Sony quadruples forecast loss for financial year - £1.04 billion or 180bn YEN
- Thread starter mocoworm
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DaSorcerer7
Member
Kaz needs to make some tough decisions.
As far as I understand spin-offs in general, they'd have to cut down to expenditure a whole lot, which means less big budget games and R&D. The slippery slope is the issue there, if you cut down on costs you cut down on mindshare, and then they'll earn even less money.
Castef
Banned
Samsung smartphones are actually very good.
bigboss370
Member
but...their phones are awesome...
they are writing off part of value of mobile business that was recorded as goodwill from their purchase of SE shares. It is accounting change. Same as what they are doing for their disc manufacturing operation, which is still profitable but they will write of a lot of its value in books so it will show as loss.
Mobile unit is their largest unit in the company, it is not going anywhere. It was profitable last year, a lot more than gaming... this year (if we take out this charge, which is accounting), it is less profitable because they launched many models which they will stop next year.
Castef
Banned
Not me. I had a bad year.
Castef
Banned
Then sell a building or your cell phone.
An earlier poster said that after mobile, gaming is the worst performing division. Their best stuff is audio, cameras and blu-ray.
See here:
HolyBaikal
Banned
Are their phones not doing good?
I actually kind of like their phones. The fact they're supposed to be kind of water resistant or water proof sounds kind of nice. I'd love to take a bath or go swimming and still use my tablet.
When I go swimming I sometimes like to spend a couple minutes underwater. It would be kind of neat to use a tablet there.
Or I could have a long relaxing bath and use a tablet there, too.
It sounds like a lot of fun. So I was meaning to try one of the Sony tablets out.
I actually kind of like their phones. The fact they're supposed to be kind of water resistant or water proof sounds kind of nice. I'd love to take a bath or go swimming and still use my tablet.
When I go swimming I sometimes like to spend a couple minutes underwater. It would be kind of neat to use a tablet there.
Or I could have a long relaxing bath and use a tablet there, too.
It sounds like a lot of fun. So I was meaning to try one of the Sony tablets out.
Garrett Hawke
Member
That's interesting. So is Vaio gone already?
Yeah, I get that. But if it was the fate of the company vs. keeping people in jobs to lose money, I think Sony would choose the former. It would obviously be good if they were able to reallocate them within the company, or with a partner company or something.
Sony is making more Loss than you, i hope so for you
I blame it mostly on a strong yen.
I probably need a new CEO.
So would it be better to look for a buyer then? Say Amazon or Google or whoever?
fixed that for ya.
The only phones Sony makes that does well are the Z and Z compact lines. Every other phone in their lineup is some low-end or mid-range phone that most people don't want. Sony needs to get out of the low and mid range market for smart phones or at least significantly scale back the number of low-end and mid-range models they release per year.
ThoughtsOfSpeaking
Banned
Anyone could of told Sony replacing their flagships every 6 months was a bad idea.
I do wonder if this company will even exist in a few years time. So many silly decisions.
I do wonder if this company will even exist in a few years time. So many silly decisions.
If Sony itself crashes and burns, they aren't going to be anymore worse for wear was my thought.
SCE i thought was one of the better performing parts of the company, but now i hear its just a money sink, so which is it?
thanks. i always thought it was silly when someone would expect them to be gone in just a few short years. seems like that would be more of a magic trick than anything.
Reminds me of that magnificent post that predicted Sony was too poor to develop a Playstation 4.
The issue with those low end phones are that they're not particularly affordable and actually look worse than the cheapie phones on the market. The primary issue has always been the awful, awful displays that make cheaper hardware from Huawei (just an example) look like significantly better value. In a way, their low end lineup devalues their own hardware and promotes other brands.
I've only started to see Sony phones from the Z2 onwards, presumably because its the first phone that they've put a half decent screen into. When you go into a Telstra or Optus store to look for a new smartphone, you're going to notice the screens so I have no idea why its taken Sony so long to put a half decent one in even their flagships.
we dont really know which ones sell the best, other than Sony saying that reason for Q1 operating loss (vs profit last year) was due to R&D for new models and marketing expense of launching them... it would seem that actual business of selling phones is doing ok, just not growing as much as they predicted so they made this accounting change basically. They are not changing their revenues so they are not predicting any change in their sales.
They are not actually losing $1.8 billion selling phones. This is what happens when you have big corporation that used to be valued $80 billion and is now valued $20 billion. At some point, they have to shrink the paper value of the company in the books and this is why you have Sony posting operating profit last year but still posting net loss. Even after this change, they forecast operating profit.
Sony accounting is hard to follow due to company being so large, old and changing performance of segments.
their projections can be seen here:
http://www.sony.net/SonyInfo/IR/financial/fr/14q1_sony.pdf
they have yearly projections for segments there... and this is the revision from today:
http://www.sony.net/SonyInfo/IR/financial/fr/14revision_sony.pdf
A full time person cannot be fired in Japan unless a company actually goes bankrupt. What would sony do with those 10s of thousands of manufacturing employees? They are between a rock and a hard place.
The M2 is a mid-tier phone (has a water resistant and not water resistant model) and it's quite well made. It looks like the Z line. I dunno everywhere else but in Spain it's doing quite well. Vodafone gives it with contracts for like 4-5/month, I dunno about other companies.
I have it and my experience so far has been quite smooth and nice.
SCE is not a money sink, it is just not crazy profitable because they are investing money into it for future gains.
Once they wrote off value of TV unit, now it makes money actually... $80 million last quarter in profits from TVs alone.
Samsung has probably released 100 phones and HTC released at least 40 in that time frame. HTC is not making money, probably less than Sony... Samsung is because they sell 6x more phones total.
Devilgunman
Member
Yeah, this is what I think as well. Sony should trim the fat and downsize to the Playstation company.
I really like Sony smartphone but availability is so limited, at least in US. It is always tied to T-mobile while their major competitor like Samsung has their phones with almost every carrier. Every time I want to buy Sony phone I have to import the unlocked phone from Canada. Why can't they make it easier?
The do tend to release too many models but Sony's real problem, as with Japan as a whole, is that they don't have enough software talent. They are trying to compete based on hardware.
Yes but they are not the flagship phones, which ones get all the marketing? The Galaxy S5 and Note 3, none of the others. And HTC didnt release many 5 inch phones last year.
Sony devalues their brand by releasing so many flagship Z phones in a short period of time,
ZeroGravity
Member
Every time you turn around, Sony's losing massive amounts of money on something different.
That's exactly what I've been thinking as well.
So based on looks? That is important too of course, but them releasing so many models, lower, mid and high end models and dropping support for some of them or has extemely slow updates aren't helping them.
so everything is fine and Sony Corp. in a good shape?
Not necessarily, I need to look on the whole annual statement. But this loss means they overvalued their transactions and the brand value of Xperia.
Kageshinzo
Member
My first smartphone was a Sony (Xperia arc). My current smartphone is a Sony (Xperia Z1). My future smartphone will be a Sony (Xperia whatever, Z193834++).
I'M DOING MY PART, SONY! DON'T SHUT OFF YOUR PHONE DIVISION!
I'M DOING MY PART, SONY! DON'T SHUT OFF YOUR PHONE DIVISION!
flipswitch
Member
Hmm, I thought Sony's xperia smartphones were popular and sell well. Guess not.
Again, this does not have anything to do with sales.
Times have changed the last 2 Years, more Chinese Companys on the Market with cheap alternatives.
This will hurt Samsung in the near future too. Sony need to concentrate on 2-3 Models, not more.
Yoshi
Headmaster of Console Warrior Jugendstrafanstalt
If you drop a business, you need to fire a lot of people (if you don't find a buyer for the division at least). Even if you are not interested in work ethics, there are still some problems:
(1) Firing people is expensive
(2) Your company sizes down, with that, the it can become harder to lend money
(3) You lose synergy effects (big production lines, houses you rent for work on various divisions, staff that works for several divisions and whose work cannot easily be scaled down), other, formerly profitable divisions may suffer through this.
Sir Qweirdy
Member
It's goodwill impairment - an accounting treatment for a loss in value of investments on the balance sheet.
Not as alarming as if it had been core operational losses on the phone business.
Yes, reflected on the income statement - and investors take that one-time hit, but on Sony's cash flow statement will be added back to net income (similar to how depreciation is treated) and would not be seen as a cash-bleed from the core operations of the phone business.
Not as alarming as if it had been core operational losses on the phone business.
Yes, reflected on the income statement - and investors take that one-time hit, but on Sony's cash flow statement will be added back to net income (similar to how depreciation is treated) and would not be seen as a cash-bleed from the core operations of the phone business.
Castef
Banned
If you have a bad arm the best thing you can do is try to heal it, instead of cutting.
The problem with Sony is that it seems they have a bad doctor.
I don't know... what's the general consensus about Kaz, finance-wise?
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