This is something I’ve been banging on for quite some time now and it looks like my hunch on Sony’s future phone strategy is materializing. In a recent media briefing in Asia, Sony took to the stage to not only to outline the history of their mobile division, but to also give clues as to where things are going. Sony currently sees three chapters in their mobile history.
Hey everyone! You may notice over the next few weekends that our site design is going to look different than what you are currently accustomed to. While Monday through Thursday we will maintain the theme that you have come to know, we are trying something new on the weekends. The themes you will see are not indicative of a specific design, but rather us testing different layouts, backend infrastructure, and visual philosophies. We hope that over these next few weekends you will continue to use SRN as you normally would, and share any feedback you might have for us in regards to the designs.
A few things we’d love to know more about:
We are excited to go on this journey with you and we can’t wait to hear your feedback!
We’ll keep this one simple. Medium is, in their own words:
a place where great ideas come from anywhere, and quality is what matters.
It’s a content community where reading your favorite publications is no longer a passive experience. It’s where writing a beautiful post is seamless, and, most importantly, it brings authors and readers together like never before. But don’t just take it from us – check it out for yourself!
Is this news to you or have you been using Medium for a while? Let us know in our poll!
If you’re a tech company, the last space you likely want to enter – if you haven’t already – is the hyper-competitive smartphone market, and if you’re already there, chances are that you’re hurting. Bad. That’s because, short of Apple and (kind of) Samsung, nobody is making money. Look no further than Sony’s 2015 mobile efforts – where all we read about is how low sales volume are compared to rivals Samsung, HTC, and LG, let alone Apple – so surely Sony needs to exit mobile, right?
(Please note that you can click on all charts for a higher resolution version)
Wrong. We’ve heard time and time again from Sony CEO Kaz Hirai that their primary focus is on premium devices and not volume – a sentiment that’s very different from most Android makers – and they’re on to something.
In theory, Sony’s strategy makes sense because, the more expensive a handset, the higher the profits on it (usually). If you’re selling a phone for only $200, there isn’t a whole lot of room for profits when you consider R&D, components, marketing, and other factors like licensing. The trouble is, Android makers are now going down the same path PC makers did a decade ago by going to war with a race towards the bottom and in turn, leaving no profits in the market.
High end Android shipments ($500 and above) have decreased from ~ 280m units in 2012 to ~ 190m units in 2015. Curse of modular..
— Ben Bajarin (@BenBajarin) February 5, 2016
This is worrisome for a few reasons. Charles Arthur writes:
That’s a decline of 90m, even while the overall smartphone market has grown from 704m (of which 501m were Android) to 1.43bn (of which 1.16bn were Android).
But your objection is probably the same as mine: isn’t the decrease in those sur-$500 shipments because the price of high-end Android handsets has fallen? The price you have to pay to get something with the same qualities as the $500-or-more Android flagship is lower than it was in 2012.
This is almost certainly true – but it isn’t much compensation for those struggling to expand their sales and seeing average selling prices (ASPs) fall.
That last part is absolutely crucial, and something that many fans miss as all they see is this large pie owned by Android.
if you keep selling the same number of phones at lower ASP, your profit will inevitably fall off a cliff as fixed costs such as staff and administration weigh you down.
As we’ve seen, Sony’s units shipped have been on a steady decline with them barely registering 30 million units sold in 2015. As a comparison, Apple and Samsung do that in a quarter.
Just look at the above chart to see the sales difference between Apple, Samsung, and LG in Q4 2015. Though Sony is only surpassing HTC and Microsoft Mobile in sales, they are far ahead of the game – and even besting LG when it comes to profits despite their 2-1 sales lead. A lot more details and charts after the jump.
Earlier today, Apple CEO, Tim Cook, wrote one of the most important declarations you’ll likely hear from a company or politician in some time. At the heart of the debate is our privacy which seems to be shrinking every day in our ever-connected and digital world. Ever read those terms and services when you sign up for an account? How about the amount of data a company like Google is mining from you? There is a reason Android is ‘free’ and offered to each vendor – and the same goes for Gmail, etc.
The US government vs. Apple
The United States government has demanded that Apple take an unprecedented step which threatens the security of our customers. We oppose this order, which has implications far beyond the legal case at hand.
This moment calls for public discussion, and we want our customers and people around the country to understand what is at stake.
The Need for Encryption
Smartphones, led by iPhone, have become an essential part of our lives. People use them to store an incredible amount of personal information, from our private conversations to our photos, our music, our notes, our calendars and contacts, our financial information and health data, even where we have been and where we are going.
All that information needs to be protected from hackers and criminals who want to access it, steal it, and use it without our knowledge or permission. Customers expect Apple and other technology companies to do everything in our power to protect their personal information, and at Apple we are deeply committed to safeguarding their data.
Compromising the security of our personal information can ultimately put our personal safety at risk. That is why encryption has become so important to all of us.
For many years, we have used encryption to protect our customers’ personal data because we believe it’s the only way to keep their information safe. We have even put that data out of our own reach, because we believe the contents of your iPhone are none of our business.
The Threat to Data Security
In today’s digital world, the “key” to an encrypted system is a piece of information that unlocks the data, and it is only as secure as the protections around it. Once the information is known, or a way to bypass the code is revealed, the encryption can be defeated by anyone with that knowledge.
The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices. In the physical world, it would be the equivalent of a master key, capable of opening hundreds of millions of locks — from restaurants and banks to stores and homes. No reasonable person would find that acceptable.
The government is asking Apple to hack our own users and undermine decades of security advancements that protect our customers — including tens of millions of American citizens — from sophisticated hackers and cybercriminals. The same engineers who built strong encryption into the iPhone to protect our users would, ironically, be ordered to weaken those protections and make our users less safe.
A Dangerous Precedent
The implications of the government’s demands are chilling. If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone’s device to capture their data. The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.
Opposing this order is not something we take lightly. We feel we must speak up in the face of what we see as an overreach by the U.S. government.
Now, what if you read this entire memo with a slight twist?
Re-read Apple’s letter substituting “Chinese intelligence” for “FBI”.
— Rene Ritchie (@reneritchie) February 17, 2016
More from Rene:
Make no mistake, what is being asked of Apple should horrify not just those in the U.S. but around the world. Nothing made can be unmade. Nothing used once will only ever be used once. The moment after an easy way to brute-force passcodes exists we, none of us, will be safe. A few criminals may be more easily investigated, but catastrophically more people will be subject to unlawful searches, hacks, theft, blackmail, and other crimes. Everywhere.
Read Cook’s letter again, but substitute the FBI for Chinese Intelligence. Imagine China, soon to be a bigger market for Apple than even the U.S., making this demand so they can more easily track and prosecute those they claim to be criminals. Then imagine it being used by governments at war with their own citizens. Now do it again, but this time with Russia’s FSB. Or once more with the NSA.
Imagine when it falls into the hands of everyone from organized crime and terrorists to lone hackers and criminals. Imagine falling asleep while the person you just met sneaks into the other room, replaces the software on your phone, and slips out with your every picture, password, message, and location. And if caught, they’re just fine — they used the same back door to replace the software with a underground version eliminating the back door.
After the jump, how this all related to Sony.
Just last week, Sony reported their Q3 FY15 earnings report to some good results. While Mobile continues to struggle (which you can read a more in depth take here), the over all health of the company continues to improve (you can again get a more in depth view of the entire company here). The one division of Sony that continues to post gangbuster numbers is PlayStation, thanks to the ever continuing momentum of the PS4.
In Q3 alone, which spans between October 1st and December 31st, Sony shipped a staggering 8.4 million PS4 units. This brings PS4 lifetime sales to nearly 36 million. At this pace, Sony should have no problem clearing 50 million units sold by year’s end. For context, Xbox One has not hit 20 million units sold yet.
More after the jump.
To better get a sense of the Sony Q3 FY15 earnings results, I’ve put together a few charts alongside official information to give you a better sense of how the company is doing. In short, things are much better compared to a few years ago and even last year when the company posted their first profit in nearly a decade. Sony Mobile, despite pumping out the fantastic Xperia Z5 family, continues to struggle. You can read more in depth about Sony Mobile and their results here.
A quick heads up. All charts can be clicked on to viewed in much more detail.
So, let’s start from the beginning again. For its Q3 2015 financial results, Sony posted a net income of 120.1 billion JPY ($1 billion) on total revenue of 2,580.8 billion JPY ($21.5 billion). That’s up 33.5% and 0.5% year-on-year. Operating income came in at 202.1 billion JPY ($1.7 billion), an 11% rise on the previous year. In short, Sony achieved $1 billion of net profits for the three months to end in December.
As you can see from the chart above, Game & Network Services (read: PlayStation), Sony Pictures, Sony Music, and the company’s Financial Services have been on the rise. Mobile is obviously hurting and in doing so, dragging down their ever-so-profitable Devices division where image sensor sales are accounted for. Here’s how the different divisions within Sony add up.
More info and charts pertaining to the Sony Q3 FY15 earnings results after the jump.
Earlier today, Sony reported their Q3 2015 results which were mostly up, thanks largely in part to their entertainment divisions, PlayStation and Sony Pictures. Mobile continues to be a struggle for Sony (and most other smartphone makers) and in turn, resulted in another quarter with losses. The only bright side was that operating revenue grew by 133% to $201 million for the division. That’s due to Sony working hard at reducing the number of phones they offer while ensuring that the models they do sell are more premium, and in turn, more profitable per unit sold. According to Sony:
a shift to high value-added models, as well as reductions in costs including marketing, research and development
was the key reason for the higher operating revenue. Ultimately though, because of their focus on more premium models, there was
a significant decrease in smartphone unit sales resulting from a strategic decision not to pursue scale in order to improve profitability
which resulted in a revenue decline 14.7% to 384.5 billion JPY ($3.2 billion).
More details on the Sony Mobile Q3 2015 results, including more charts after the jump.
If you look at the above photo which reads
The performance packed into the top-class 4K Handycam® is peerless. Balanced Optical SteadyShot™ and Fast Intelligent AF achieve exactly the images you aim for. A new microphone structure captures ambience that’s all-surrounding. You can even play with time in motion or gain control of pro-style/manual functions. The possibilities and pleasures are endless.
what would be your takeaway from Sony’s newly-announced 4K Handycam that I previewed at CES? Or how about this
which reads
The short movie below shows the camera shake compensation effects of Balanced Optical SteadyShot (right) and optical image stabilisation (left), respectively.
I don’t claim to know everything there is to know about Sony but even I, who should hopefully be a little better versed in the company and their products, thought, when reading their page about the AX53, that it offered 4K video recording with Balanced Optical SteadyShot.
Except it doesn’t, despite the words 4K being plastered all over the page and the improvements of image stabilization being touted left and right. More after the jump.
As you might have heard by now, Sony Computer Entertainment and Sony Network Entertainment are being fused together under a new company called Sony Interactive Entertainment LLC. This is important because until now, Sony Computer Entertainment (SCE) has been in control of all PlayStation-related hardware and software (games) while Sony Network Entertainment (SNE) has lead services like PlayStation Vue and PlayStation Store. Now under SIE, Sony will be combining the two divisions and bringing them under one headquarters in San Mateo, California.
Under the new company, there will be some leadership changes as well with Andrew House leading things as CEO and President. According to House:
“By integrating the strengths of PlayStation’s hardware, software, content and network operations, SIE will become an even stronger entity, with a clear objective to further accelerate the growth of the PlayStation® business. Along with our business partners, SIE will develop pioneering services and products that will continue to inspire consumers’ imaginations and lead the market. We will work hard to maximize corporate value by coordinating global business operations across San Mateo, Tokyo, and London by leveraging local expertise.”
While there will be offices in Tokyo and London, the majority of R&D, as well as decision making, will be done out of California. The two remote offices will lead localization efforts which are ever so important, for instance, in Europe, a region that consists of several different countries, languages, and policies. But that aside, the real story here is that after two decades, PlayStation is leaving its country of birth and coming to North America. Nostalgia aside, this is actually a good thing for Sony, the future of PlayStation, and gamers. A lot more after the jump.
One of the major takeaways from the Sony keynote at CES 2016 was when Sony Electronics COO and President, Mike Fasulo, took to the stage. Beyond a handful of jokes that never landed properly with the crowd and some dazzling product announcements like the X930D series of 4K HDR TVs Sony would be releasing this year, Fasulo was keen to point out the direction of the company in 2016.
We’re not after marketshare. We’re after delivering to the customer the best experience through audio and visual quality, and by doing so we’re making money.
Nearly 3 weeks later and I’m still not sure what I make of this.
It’s no secret that Sony hasn’t been doing well for some time now. PlayStation aside (and even that was turbulent for the company during the PS3 era), Sony hasn’t had a hit consumer electronics product for over a decade. I mean really, think about it. During that time, its competitors have been able to bring to market a plethora of hit products from established companies like Apple and Samsung to much smaller ones like GoPro and Sonos. What these companies have in common is that they’ve been able to knock Sony out of a field they were once dominant in – or at least known for, or should have been known for.
When you think of phones and tablets, Apple comes to mind. If your friend or family member is getting a new TV, it’s likely a Samsung, and everybody who wants to do some extreme and record is likely purchasing a GoPro. Though this is not always true, perhaps worse for Sony is that in many of these product categories, they make the superior product and yet they’ve completely fallen out of the consumer psyche when it comes to electronic purchases.
Sony knows this and has referenced it during their last two CES keynotes, but only this year did the company make a statement that took the problem head on. In short, Sony is no longer interested in chasing the entry level consumer market where price is the only sales driver. This is a market that was once flooded by Samsung and now by Vizio where the only way to a make a profit (and that’s oftentimes not guaranteed) is by selling units in large volumes.
Sony instead now wants to target the more premium market where they know unit sales will be lower, but hope that in turn, margins can be higher. After all, wealthy clientele are usually more willing to pay the extra premium on the devices that have been stuffed with new and innovative features. But hasn’t Sony always been doing this?
Besides looking aesthetically remarkable, especially when you look at the X930D as it spins around, you’ve likely noticed that the 4K HDR TV has shed some weight when compared against the 2015 X930C. That’s because, unlike Sony’s 2015 lineup of 4K TVs, which included the ultra-slim X900C and the flagship X930C with its built-in Magnetic Fluid Speakers, the 2016 lineup is just the X930D.
Instead of creating two different high-end televisions that cater to different consumers, Sony has combined the two lineups, offering us one of their best looking televisions ever with deep blacks and bright whites while also playing into what consumers feel they want: even slimmer televisions. As someone who was a huge fan of the X930C, I truly appreciated the Magnetic Fluid Speakers which made setup far less complicated, that is to say that in our condo, we could have a TV that not only looked stellar, but one that provided audio that rivaled many surround sound systems without the hassle of dealing with all the wires.
The reality however is that in that equation, I’m the outlier and that Sony’s flagship series is primary targeted at home theater enthusiasts and wealthy consumers who likely already had surround sound or would have purchased one along with their new TV.
This meant that the X930C was priced higher than its competitors and was even seen as less aesthetically attractive, due to its bulkier design. Making matters worse, a segment of the community also complained that due to the speakers on the side (which were not removable), the X930C was harder to mount as you had extra inches on each side (pictured right). This is especially important for TVs that are mounted inside cabinet like fixtures or bedroom walls with limited space.
Though perhaps now a little less unique, Sony dropping their Magnetic Fluid Speakers is likely the right thing to do. More after the jump.
Fox News isn’t the only place that likes to take a small soundbite and spin it. Over the past few days, a lot has been said and made from the comments of Oculus Rift co-founder Palmer Luckey. When talking about PlayStation VR and Oculus in general, Luckey had this to say
It’s also worth noting that their headset isn’t quite as high-end as ours
Out of context, that seems to be a direct jab at Sony and PlayStation VR. After all, Oculus just a week ago revealed their price ($599) which doesn’t include the gaming PC you need to run it, really placing you around $1,500 or higher. On the other hand, the cost of VR from Sony will be considerably less, seeing how you need a PS4 ($350) and PS VR – which, even if it costs the same as Rift, will mean you finish out under $1,000 – and many expect PS VR to cost $399.
Despite all websites’ best efforts at creating some form of controversy around Luckey’s comments, it’s worth putting what he said in context.
I think that there’s not many people who already own a PS4 who don’t own a gaming PC who are going to go out and make that roughly $1,500 all-in investment in the Rift. It really is a separate market. They’re bringing virtual reality to a different group of people who I don’t think were ever really a part of our market anyway.
It’s also worth noting that their headset isn’t quite as high-end as ours — it’s still, I think, a good headset — and the PlayStation 4 is not nearly as powerful as our recommended spec for a PC.
In its entirety, nothing Luckey says is false. Any new PC gaming rig will certainly be more powerful than the PS4, seeing how you can scale those models with the latest CPU/GPU combo and RAM. Yet just because a BMW 7 series exists, it doesn’t make the 5 series any less luxurious. They’re both designed to impress but are targeted at different demographics like this instance.
In fact, Luckey follows up his comments with how Oculus and Sony enjoy a working relationship. Those details after the jump.
It almost seemed like a sure thing. After having 4K TVs on the market for over two years and announcing the impressive new 4K HDR X930D Android TV, surely Sony would also unveil a 4K UDK Blu-ray player. In fact just two months ago, Sony Pictures announced six 4K HDR Blu-ray titles for 2016 which require the new UHD players for playback.
Alas, it’s not meant to be as no 4K UHD Sony Blu-ray players were announced at CES 2016. More on this after the jump.
Each year as we head to CES, I try to share with you our journey to the tech mecca and how we plan to cover things. As most long time readers will note, SRN is not a large funded site like Engadget or backed by Sony so not only is the entire show costs upon my own shoulders, but so are the equipments used to cover.
That tends to then make for an interesting dynamic as the equipment I use and purchase needs to versatile enough to cover CES and other similar events while also hopefully being useful in other arenas as well. In addition to the site, make sure you connect with us on all of our social feeds as a lot of times it’s easier to upload pics and videos there versus publishing a full length article around it on here.
After the jump, my CES equipment pile.
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