Sony switchers face development limbo!

[4D]

Now we now why Canon marches to its own tune. it remember's Sony's dismal record of commitment to its own technology and customers.

https://www.bloomberg.com/news/articles/2018-05-20/new-sony-ceo-to-detail-shift-away-from-gadgets-in-mid-term-plan?utm_source=twitter&utm_campaign=socialflow-organic&utm_medium=social&cmpid=socialflow-twitter-business&utm_content=business


"Sony Corp. is done working for peanuts in the hardware business.

Kenichiro Yoshida, who took over as chief executive officer in April, is set to unveil a three-year plan on Tuesday that embraces Sony’s growing reliance on income from gaming subscriptions and entertainment. The transition is already happening: even though the company sold fewer hardware products such as televisions, digital cameras, smartphones and PlayStation consoles in the year through March, it was able to post record operating profit.


It’s a tectonic shift for a company built on manufacturing prowess. Sony popularized transistor radios, gave the world portable music with the Walkman and its TVs were considered top-of-the-line for decades. With the rise of Chinese manufacturing, making and selling gadgets has become a business with razor-thin profit margins. Investors have applauded the transformation that’s been under way since Kazuo Hirai took over as CEO in 2012, with the shares climbing more than five-fold amid a turnaround."

"Sony is proving that it can evolve with the landscape ... with a shift from a hardware-to content-driven profit model,” SMBC Nikko Securities Inc. analyst Ryosuke Katsura wrote after the company’s latest earnings report last month. “The real key is whether it provides investors with a clear road map.”

 

[3kramd5]

You take this as an indication they’ll stop producing cameras? I don’t; it’s likely a strategy to maximize recurring revenue, little more.

 

[4D]

You take this as an indication they’ll stop producing cameras? I don’t; it’s likely a strategy to maximize recurring revenue, little more.

I never said anything about production, for now, of course they will continue making them for the foreseeable future.

Besides, it was mostly a dig at Sony trolls. The main point being that why would they spend hundreds of millions on R&D for new cameras if they aren't committed to a hardware-production future?

 

[LDS]

It means next Sony cameras will come with a subscription model, i.e. a model where you buy and have to recharge every 36 shots... ;D

We're in a phase where all CEO see those who switched to a subscription model are making money, so #MeToo!!.

It will saturate - how many subscription people can bear and manage? - and crash.

The worst thing is is still relies on manufacturing capabilities, and once you send all of them to China or the like, one day you'll have really nothing to sell - including the contents and subscriptions.

 

[3kramd5]

You take this as an indication they’ll stop producing cameras? I don’t; it’s likely a strategy to maximize recurring revenue, little more.

I never said anything about production, for now, of course they will continue making them for the foreseeable future.

Yah that was my attempt to understand the supposed dilemma faced by switchers.

 

[Mt Spokane Photography]

Sony has a history of dropping products that are not making money. Service of discontinued items usually does not produce much income, so they stop to encourage purchasing the latest model. I expect to see more concentration on hardware that makes money. Camera sensors were a big profit item 3 or 4 years ago, but now that Smartphone sales have slowed down, Sony is stuck with expensive new factories but no orders. They may make offers to Canon that are too good to refuse.

The big items dragging down Sony profit continue to be smart phones and TV sets. They keep making them, but we may see that finally come to a halt.
Cameras are a profitable item, but sales are dropping, particularly for Sony as Canon and Nikon grab more market share.

We'll have to see what the future brings, but with Canon and Nikon poised to enter the FF mirrorless market, it does not look good for Sony's future camera sales.

 

[3kramd5]

Here was what Sony presented to investors today:

<Branded Hardware>

Branded Hardware, is comprised of the Home Entertainment & Sound (HE&S), Imaging Products & Solutions (IP&S), and Mobile Communications (MC) segments that bear the Sony brand. Sony will aim to position Branded Hardware as sustainable and consistent cash-flow generating businesses that enable continued investment in the Sony Group's growth. In the last fiscal year, Branded Hardware was the driving force behind Sony's record profits, and, over the next three years, it is expected to be the business which generates the most stable cash flow. In this area, Sony will continue its policy of targeting profitability and the premium market rather than unnecessarily pursuing volume.

https://www.sony.net/SonyInfo/News/Press/201805/18-048E/

Nothing there which sounds like they’ll abandon the camera market. Perhaps the 2000 US dollar price point will be near the floor however.

 

[fullstop]

hahaha, Sony going Adobe. Don't sell cameras and lenses, just rent them out under an ongoing subscription model. the moment you stop paying, the camera/apps running on it will not output 4k video or full-rez raw images any longer, but only 640x480 jpgs and 720p video. lol.

The money grab subscription scheme may well work, see adobe. a good portion of people today is naive and dumb enough to happily pay monthly rent for anything and everything.

 

[9VIII]

YAPODF...Sony Alpha?
Except this prediction comes from the company themselves. Yikes.

The Sensor business makes them tons of money though, there’s no way they’re giving up “component” manufacturing, but I’m glad the only mirrorless camera I have is a Fuji right now.

It would be sad to see Sony Alpha go the way of the Samsung NX.

 

[jolyonralph]

I think we'll see the Sony DSLR A range quietly disappear in the very near future (sorry, Minolta fans), but the Sony E and FE mount cameras are here for quite a while.

 

[Tugela]

He is not talking about high margin products such as cameras, he is talking about the cheaper consumer products, such as earphones and the myriad of other minor low margin gadgets Sony makes. There is probably not enough profit in those to make it worthwhile, on the other hand the content for those devices is very profitable.

That is the change in emphasis he is talking about. They will still be making high margin products, provided the market for those still exist.

For context, you often see Canon talking about their diversification into other high margin fields. By your logic that must mean they are getting out of the camera business. Do you see the error in your thinking?

 

[Loswr]

Do you see the error in your thinking?

How ironic. Go find a mirror.

 

[BillB]

Here was what Sony presented to investors today:

<Branded Hardware>

Branded Hardware, is comprised of the Home Entertainment & Sound (HE&S), Imaging Products & Solutions (IP&S), and Mobile Communications (MC) segments that bear the Sony brand. Sony will aim to position Branded Hardware as sustainable and consistent cash-flow generating businesses that enable continued investment in the Sony Group's growth. In the last fiscal year, Branded Hardware was the driving force behind Sony's record profits, and, over the next three years, it is expected to be the business which generates the most stable cash flow. In this area, Sony will continue its policy of targeting profitability and the premium market rather than unnecessarily pursuing volume.

https://www.sony.net/SonyInfo/News/Press/201805/18-048E/

Nothing there which sounds like they’ll abandon the camera market. Perhaps the 2000 US dollar price point will be near the floor however.

Sony's camera development does seem to fit with a strategy of targeting profitability and premium markets. However, will Sony's camera business result in a sustainable and consistent cash flow? We really don't know what kind of return on investment Sony has been getting on its high end camera lines. They have generated a lot of internet buzz, but how much money have they made? More to the point, how much money does Sony corporate management think they will make on high end cameras in the future?

 

[old-pr-pix]

For 2018 CIPA forecasts an overall market decline in unit sales of just over 6%... Sony's graph shows their digital camera units are expected to drop from 4.4 million units to 3.8 million - a 14% decline or more than double the market drop! Not exactly a formula for share increase.

 

[Don Haines]

Remember Olympus and the 4/3 cameras?

One day they were a flagship product, the next day they were discontinued and "the future is micro 4/3".

If Sony comes to the conclusion that their (pick your format) cameras are not profitable and never will be again, they will drop them so fast that if you blink you will miss it!

 

[jolyonralph]

If Sony comes to the conclusion that their (pick your format) cameras are not profitable and never will be again, they will drop them so fast that if you blink you will miss it!

That's the same with any corporation, Canon included! I really don't see what your point is.

 

[BillB]

If Sony comes to the conclusion that their (pick your format) cameras are not profitable and never will be again, they will drop them so fast that if you blink you will miss it!

That's the same with any corporation, Canon included! I really don't see what your point is.

At that level of generality, it is true of all companies. The difference between Sony and Canon is that Sony is a recent entrant to the high end camera business, while Canon is a well established player. In a market that has been contracting, Sony needs to build design and manufacturing capabilities and increase market share, while Canon needs to strengthen existing capabilities and maintain market share. It is Sony that faces the greater uncertainty and risk.

 

[3kramd5]

For 2018 CIPA forecasts an overall market decline in unit sales of just over 6%... Sony's graph shows their digital camera units are expected to drop from 4.4 million units to 3.8 million - a 14% decline or more than double the market drop! Not exactly a formula for share increase.

No, but as indicated above they aren’t interested in volume, they’re interested in reaping profit in premium markets.

 

[old-pr-pix]

The world needs companies like Sony - willing to boldly go where none have gone before. Sometimes the rewards are handsome and long lasting, the Walkman as example. Other times competition determines a tweak here or there and the idea can be more successful, Memory Sticks, Mini-disks, Beta VCR's come to mind. In the case of mirrorless cameras, Sony brings new technology to only a small part of the overall required system. They may be the leader in that narrow area, yet they also incumber themselves with the need to develop an entire spectrum of additional aspects of the system at significant cost. Especially if their target is the higher end/higher margin models. Lenses for example need to be top shelf to match established competition. Professional grade service likewise needs to be first class if success is expected. Software, accessories (flashes for example), all have to created just to allow their technology to be presented to the market. So far Sony has been willing to spend the money to try to catch-up with competition in these surrounding parts of the system. Will they continue to think that's a great idea if sales keep dropping? That's the underlying question.

 

[Loswr]

For 2018 CIPA forecasts an overall market decline in unit sales of just over 6%... Sony's graph shows their digital camera units are expected to drop from 4.4 million units to 3.8 million - a 14% decline or more than double the market drop! Not exactly a formula for share increase.

No, but as indicated above they aren’t interested in volume, they’re interested in reaping profit in premium markets.

Fine. Sony is predicting that profits will be flat for 2018, i.e. no change from 2017. Canon is predicting a 17% increase in profits. So Sony's formula isn't working as well for what they are interested in, either.