With consumer spending converging on
Apple Inc's iPads and Samsung Electronics Co's Galaxy phones, Sony on Thursday
forecast smartphone sales to rise more than one-fourth to 42 million in the year
to next March. It predicted sales of its digital cameras and Playstation
consoles would contract at double-digit rates.
Its five-inch screen Xperia Z smartphone
has exceeded the company's sales expectations since its launch in January, but
it faces an uphill battle against Chinese rivals and Samsung and Apple.
"It (42 million) does not seem a lot. Its
smartphones are high-spec and production costs should be hefty, so the company
has to sell a lot to be profitable in the business," said Mitsushige Akino,
chief fund manager at Ichiyoshi Asset Management.
Boosted by a weaker yen that inflated the
value of its euro-denominated sales, and by the expected elimination of losses
in its diminished TV unit, Sony is betting on its new smartphone to help it
secure an operating profit of 230 billion yen ($2.33 billion) this business
year. That compares with the average 210 billion yen profit estimated by 19
analysts surveyed by Thomson Reuters I/B/E/S before Thursday's earnings announcement.
AIMING FOR NO. 3
Sony's boss, Kazuo Hirai, in 2012
identified mobile products, gaming
and digital imaging as the core of a rebound in consumer
electronics after more than a decade of decline for the pioneer of
personal music players and compact discs. Of those three, mobile has since
emerged as the best near-term hope for Sony to turn around its electronics
business.
Its goal is to fend off challenges from
China's Huawei Technologies and ZTE Corp and Korea's LG Electronics to secure the No. 3 slot in the global
smartphone market, behind Samsung and Apple which between them account for more
than half of all smartphones sold.
The Japanese company, however, will need
to cement better ties with carriers in the United States to win market share
there and may struggle against its Chinese rivals in their home market, analysts
say.
"The Xperia range is selling well where
available, but Sony's limited retail
presence in major markets
like the U.S. and China is restricting its growth," said Neil Mawston,
executive director at market researcher Strategy Analytics
. "Sony
captured less than 1 percent of the valuable U.S. market in 2012."
. "Sony
captured less than 1 percent of the valuable U.S. market in 2012."
Strategy
Analytics expects the Japanese company to ship 41 million smartphones worldwide
in 2013, giving it a 4 percent market share. Sony, which was ranked fourth
globally by research firm IDC in the fourth quarter of last year with a 4.5
percent share, fell out of the top five in the January-March quarter.
Analytics expects the Japanese company to ship 41 million smartphones worldwide
in 2013, giving it a 4 percent market share. Sony, which was ranked fourth
globally by research firm IDC in the fourth quarter of last year with a 4.5
percent share, fell out of the top five in the January-March quarter.
ASSET SALES, MOVIES AND
INSURANCE
Sony bounded back into the black last
year with a profit of 230.1 billion yen that was bolstered by earnings from the sale of office buildings in Tokyo
and New York, the revaluation of stock holdings and gains from the sale of
businesses including a chemical unit.
"Selling assets wasn't just about helping
our balance sheet. It is part of a strategy to revamp our business portfolio,"
Masaru Kato, Sony's chief financial officer, told a news briefing.
Financial services - mainly its insurance
subsidiary - posted an operating profit of 146 billion yen, making it the
consumer electronics company's most profitable business. Movies and music
combined added a further 95 billion yen to profit.
This business year, the squeeze on Sony's
traditional consumer electronics gadgets is set to continue. The maker of Bravia
sets forecast sales of televisions to rise to 16 million this business year with
the division seen returning to profit, after a sharp drop last year to 13.5
million. It had made 19.6 million TVs in the year to March 2012.
Digital camera sales are forecast at 13.5
million this year, a 20 percent drop, while its handheld game consoles, the PSP
and PS Vita, are projected to fall nearly 30 percent to 5 million.
Since the start of the year, Sony's
shares have gained 82 percent compared with a 37 percent rise in the benchmark
Nikkei average. Its
shares fell 1.4 percent on Thursday to close at 1,744 yen before it released its
latest earnings results and forecasts.
($1 = 98.8200 Japanese yen)
(Additional reporting by Jonathan Gordon
in Hong Kong and Ayai Tomisawa in Tokyo; Editing by Edmund Klamann)
This Article s written by: Tim Kelly
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