Sony’s Xperia division apparently turned a profit for the first time in years
Last week, we asked our readers what they thought about the future of Sony’s smartphone business. Given LG’s recent withdrawal from the industry, many were concerned that Sony would be next. However, there are many clear differences between how the two businesses operate despite neither gaining much traction, and Sony’s latest earnings report reflects that. In the Japanese company’s latest earnings result, the Mobile Communications division reported a profit for the first time in years, which is promising news for the future of Xperia devices.
As reported by PhoneArena, Sony sold around 400,000 Xperia smartphones in Q1 2021, a decline from the nearly 1 million units sold in the previous quarter. Demand for Xperia smartphones remained stable, however, as Sony also sold around 400,000 units in Q1 2020. The company sold a total of around 2.9 million Xperia smartphones during FY20, down from 3.2 million sold in FY19. While these numbers confirm that Sony’s Xperia business is pushing fewer units than before, the drop in numbers is less drastic than before.
What’s more, FY20 is the first time since FY17 that Sony’s Mobile Communications division has turned a profit. The mobile division reported an operating loss of 14.12 billion JPY (~$129.58 million) in Q1 2021 and 27.67 billion JPY (~$254.09 million) in FY20. The company’s Electronics Products & Solutions (EP&S) business reported a big jump in profits owed to the significant reduction in costs of the Xperia division. “Operating income increased 51.9 billion yen year-on-year to 139.2 billion yen. This significant increase in operating income was primarily due to reductions in operating costs mainly within Mobile Communications” said Sony in its earnings report. You can read Sony’s full financial disclosures here and here.
For those of you worried that Sony will go the way of LG, the former’s latest earnings report is evidence against that. While the Xperia division isn’t moving many units, they sell a few, highly profitable SKUs that cater to a specific niche. Comparatively, LG failed to turn a profit after spending years trying to compete with Samsung and Chinese smartphone makers in volume. More competition is always good, and a profitable mobile division means that Sony has an incentive to keep investing in the future of the Xperia product line.