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Sony expects mobile profit in 2020 despite revenue decline

Jasper Hart
August 5, 2020

Sales down but sector generating profit due to operations cost cutting

Sony anticipates its mobile division to make a profit in its 2020 financial year, despite continued revenue decline.

The Japanese tech giant’s revenue for the first quarter of its current year stood at JPY94 billion (£ billion), down from JPY100 billion last year. According to supplemental information supplied with the earnings, it sold 0.8 million smartphones, down from 0.9 million last year.

However, in an earnings call with analysts, executive deputy president and CFO Hiroki Totoki said the business generated a profit due to cuts in operating costs, and was on course to continue generating profit in the full fiscal year.

“Mobile Communications recorded JPY11 billion in operating income during the quarter, and we expect it to generate a profit in the full fiscal year,” he said.

Elsewhere, Sony saw a slowdown in demand for image sensors in the smartphone market, which caused its sales and operating profit decline to JPY206 billion and JPY25.4 billion, drops of 10 per cent and 50 per cent respectively.

Its music and film businesses also saw declines due to a reduction in physical media consumption and worldwide cinema closures due to the Covid-19 pandemic.

However, overall the company recorded operating revenue of JPY1.97 trillion, a slight increase on last year, due mainly to the success of its gaming division. Lockdown-induced demand for gaming services saw revenue for the division rise by nearly 33 per cent annually to JPY599 billion, and saw profit of JPY124 billion.

According to a recent study by Compare My Mobile, Sony’s smartphones depreciate in value far more quickly than other brands.

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