Sony Makes a Profit Appear and Units Fly Off the Shelves

Last Updated Jul 30, 2010 4:23 PM EDT

Sony (SNE) released its quarterly results and surprised everyone by being in the black. Profitability has been an elusive quantity at the company's headquarters, so the announcement has gains significant attention. But this wasn't just an issue of cutting costs. Sales in dollars and units are up. The business is expanding again, after a considerable contraction, and competitors that might have begun to write off Sony will have to take a long and hard look.

One set of data to peruse is a slide used during the earnings presentation that gives a summary of unit movement in a number of important consumer product lines. (Remember that Sony calls a fiscal year by the calendar year in which it starts and not, as is customary in the US, by the year in which it ends. Click to see the full-sized chart.)


The pricing changes and new PlayStation 3 model introduced last fall helped more than double unit sales year over year. Oddly, PS3 software was up 67.6 percent but Sony expects unit sales to be approximately the same as last year, suggesting that growth will quickly taper off and that unit sales may be down. Sony expects PlayStation Portable and PlayStation 2 unit sales to decline during the year, but given their ages, that should be no surprise.

Video camera unit sales are flat compared to last year, maybe because so many smartphones and regular digital cameras do video as well. But PC sales were up sharply and compact digital cameras grew by 20 percent. LCD TV sales grew by about 60 percent.

Another view of the business segments is by dollars:


Notice that the growth in consumer products (CPD) and networked products (NPS) looked even stronger when calculated on a constant currency basis. Such companies as Microsoft (MSFT), Samsung, LG, and Canon will have to reevaluate Sony and adjust their strategies accordingly.

There are a couple of business units that were truly hurting. One, movies, brings up critical issues for Sony. Even more than the gaming industry, it depends on having big hits on a regular basis, and home entertainment sales are down because of "lower sales of catalog product." That translates into fewer people buying DVDs. Why bother when you can rent them through Netflix (NFLX) or download from one site or another? There is one segment that will continue to have a difficult time.

Related: Wing image: VooDoo4u2nv, site standard license.
  • Erik Sherman On Twitter»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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