[Editorial] Can Sony's Digital Imaging Division Restore Profits?

[Editorial] Can Sony's Digital Imaging Division Restore Profits?

As many of you have probably already read, Sony Corp announced that it is cutting 10,000 jobs, which translates to 6% of its global workforce. Sony has been struggling with negative profits for four straight years, mainly due to its floundering television division. But what does this mean for Sony’s camera division? With the television sector likely getting the main force of the cuts, will Sony rely on growth in their digital imaging division to make up for the numbers?

Sony lost a lot of money in televisions last year. Their sales and operating revenue (to external customers) was down to 238,194 million yen from 416,914 yen last year, a staggering 42.9% loss over 12 months. Though Sony will likely cut jobs from across the company, I am willing to bet a majority of those jobs will be in the televisions division. Those folks just don’t seem to be able to develop the kind of technology they need to compete at a cost effective price point. If they could, Sony wouldn’t be in this mess right now.

But as camera folks, what happens in to their television division is not really the concern for us. Let’s instead focus on what Sony is touting to be a big winner: their camera division.

Sony was particularly proud of the successful expansion into the mirrorless camera market with the Alpha NEX series. In their 2011 annual report, they bragged about their now 15% share in the global market for interchangeable lens digital cameras, up 5% from fiscal year 2009. They then make the promise to “increase their lineup of interchangeable lens digital cameras and take decisive steps aimed at cultivating this new market category.” They even highlight the NEX series as a major point in their “Focus Areas For Growth” segment of their Annual Report.

Sony’s choice to cultivate the expansion of their non-reflex cameras is not just based on their sales. According to the Camera and Imaging Products Association, 2011 saw “non-reflex” cameras take a 23.2% share of the total interchangeable lens camera market. That’s huge, as this means mirrorless cameras have jumped yet another 10% in market share since 2010. However, about 37% of the total global market for these cameras was sold in Japan. Sure, success in Japan is great, but a product requires steady and even global distribution to hold on to success. With such a large chunk of share based solely in Japan, the question can be asked: “Do mirrorless cameras have a future?”

In Sony’s case, they are banking on it. Their DSLR sales haven’t been able to compete with Nikon or Canon. In fact, I just checked Amazon.com, and the only Sony product to make their Top 50 Digital SLR Cameras clocks in at a resounding 41st place. Almost sad really. That means the core of their sales business has to come from their Cyber-Shot series, their Alpha NEX series, and their video camera division. Their cyber-shot business seems to be doing moderately well, shipping 24 million units in 2011, which is up 3 million units from the previous fiscal year. Their video camera division holds a strong 43% market share, with 5.2 million units sold worldwide. They plan to expand their Handycam line and introduce 3D models that, they promise, will deliver better picture and sound quality as well as introduce a model featuring a built-in projector function.

That’s all well and good, but we need to look at the hard facts: The second most losing area of Sony’s consumer products division (and their second most losing overall) behind Televisions, was their Digital Imaging division. They only sold 120,179 million yen worth of digital cameras, down from 188,477 million yen from the previous year. That’s a 36.2% drop, which is not far from their struggling televisions division. Oh, did I mention that for as many years as televisions have been struggling, so to has the Digital Imaging division? Ouch.

To lose that much money, yet still claim success and growth in both Cyber Shots and video cameras leads me to believe their biggest losses were in mirrorless and DSLRs. If Sony is going to try and make a real run in this area, they’re going to have to do better. Obviously a 15% market share in mirrorless cameras isn’t enough to make up for their feeble DSLR share (which, I might add, remained conspicuously absent from their 2011 annual report).

Of course, Sony is also relying on their tablet sales (which I can tell you right now are nothing like Apple's iPad sales) and phone sales. However, you can't deny the size of the Digital Imaging division. It's the second largest piece of Consumer Products, the largest segment of their company. They have to be relying on future camera success.

What do you think? Can Sony turn things around through their Digital Imaging division? Let us know your thoughts on Sony in the comments below.

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Well, When it comes to point and shoot cameras.  I have seen some great products come out.  Matter of fact if I were to buy another point and shoot, it might be a sony.  (I'm a canon user)  I teach photo classes and getting hands on experience with all DSLR body types, Sony is by far the worst,  they would have to completely revamp their series to even come close to be competitive with Canon and Nikon.  I would like to see a 3rd powerhouse in the DSLR market to drive down prices and continue to push the edge in what cameras can do, but I don't think that 3rd head will come from Sony.

I played around with an NEX and actually really liked it. I shoot Canon as my DSLR as well, and I agree. If I need a point and shoot (which since I have an iPhone I have a hard time rationalizing the purchase), it will likely be a Sony. I've never held a Sony DSLR. What about it made it so bad?

jonathan thorpe's picture

sony really could make an amazing dslr, the a900 was a great camera sharing the same d3x sensor. but two things for my killed it, the left hand side for your hand to hold the camera is way to small, and the hot shoe mount is totally different than anything else out there, requiring you to to purchase an adapter to even use a simple pocket wizard.

not a good move sony.

OK, attention all Canon, Nikon users out there, you will be all making the switch to SONY very shortly , I cannot give you any details yet but come October those other Camera companies will be crying all over the D4's, 1Dx's and other such bodies, I have tested what SONY are bring out and after 20yrs shooting Canon that will be no longer VERY shortly.... WATCH THIS SPACE...

 Yeah... you are named sony smile, make up their terrible new camera, and still think pros will sell 10k worth of gear to buy into a subpar system, yeah RIGHT LOL!!!!!!

It's the system not the body for pros, nerdite.

Hey Twit, do you know how to even operate a real camera, I'm posting as SONYSMILE for a very good reason. I am not a nerd!!! dick head!!! I'm simply letting you know, you will have a choice come October 2012. Its actually more like 30k if you are a real pro, which clearly you are not. Doesn't make a difference to me what gear you use. But for some idiot to think Sony is subpar!! You haven't a clue what you are talking about :)

RUSS's picture

Over priced, and shit, is just not wanted by many

Lampino's picture

bwahahahhaahahahahahha!! sony?? bwhahahahahahahahah!! and.. bhahahahahahahaa

Sony has traditionally had difficulty reaching mass markets. This goes back years and years. And years. They have a tendency to get something really right, which seem to be accidentally found by consumers. The product sells like gangbusters, and then Sony sit on their collective laurels while sales erode away. Then, they wonder what the heck happened.

In the long run, Sony will be all right. They've weathered similar financial storms, and always seem to come out just fine in the end.

Much like any other line, there are those who will support Sony till the bitter end (like me), and there are those who will jump ship at the first sign of danger.

Personally, I love how Sony DSLRs feel. My A500 is fantastic, and I enjoy all that I can do with it. It works for me. It feels comfortable to me. Certainly, someone who has shot canon or nikon for years may not feel the same, or will feel that it's just not right. When I jumped ship from blackberry (which I used for almost 5 years) and took on an Android phone, it was the worst feeling ever! Email was difficult, it wasnt intuitive... it was a frustrating experience at first. After a few months of getting used to it, though, I have learned to like it, and get more used to it daily - in fact, I now have an android based tablet, and am learning to use it to its fullest as well.

The technology behind the Sony line is great. In the end, I think that Sony is doing the right thing. A canon is a nikon is a sony in regards to taking a picture. With enough photoshop, almost all modern DSLRs are the same. Sony is making themselves different by using a different technology. In regards to the NEX line, Im not a fan. However, someone who is looking for great image quality without toting a bludgeoning weapon along for the ride is likely to find something fantastic. As the culture in the US (or any country) changes, and the technology behind moving and sharing data changes, so will the consumer products people get behind. Sony is big on unification, and I bet they have something brewing towards making their cameras more friendly in regards to ease of use.

When I say watch this space I mean it !!!!! I will be making the switch from Canon to Sony very shortly, with amazing Zeiss lenses and the incredible Sony camera they will have out soon. All pro's will be trading there Canon's etc for these new game changers.... 

Chris Helton's picture

SONYSMILE you've got us all sitting in anticipation. What do you know??!! Sony HAS certainly been bringing a lot of dog to the fight, but they still have some things that are killing them in their match against canon and nikon. Have to admit I love their ZEISS glass, translucent mirror technology, and the mirrorless NEX series. Can't wait to hear about these 'game changers' though

 The Zeiss lenses produced by COSINA? LOL!!!!!

Your fanaticism fails to impress me, though. 

For some gearheads, though, it really is just a name. 

If Leica made a subpar point and shoot, then priced it $2k you'd probably buy it.  Oh waitaminute.


And it's back ordered. I spoke too early I guess.

Indeed, but now you will have real choice!!!!


Chris Helton's picture

SONYSMILE you've got us all sitting in anticipation. What do you know??!! Sony HAS certainly been bringing a lot of dog to the fight, but they still have some things that are killing them in their match against canon and nikon. Have to admit I love their ZEISS glass, translucent mirror technology, and the mirrorless NEX series. Can't wait to hear about these 'game changers' though

Chris, thanks for posting!! Mate I cannot say anything yet as I have signed agreements etc, But I will tell you that from what I have seen SONY's new gear leave both CANON & NIKON in the dust!!! No Canon lenses or Nikon lenses can match Medium Format Zeiss tech on a 35mm body with incredible responsiveness. Obviously I am a seasoned pro of 20yrs, but I cannot give my real name as yet, I should be able to shout this stuff to the world any day now.... Stay tuned Lee & Patrick and other folks.

RUSS's picture

A pro who calls people names, doesn't seem professional.to me.

Hey Russ, what are you in 5th Grade... Grow up man.. I was simply pointing out the tone of that guys opinion who lacks any information of what he is talking about.

Jaladhi's picture

Sony has done well with their compact camera sales over the years. I don't have numbers but I'd imagine, they are behind Canon and Panasonic but probably ahead of Nikon and others. With DSLRs, they might have done better if they had kept the Minolta branding. DSLR market tends to be loyal to the established brands. Sony is doing the right thing by innovating with the SLT technology. That is the best way to differentiate their products from Canon and Nikon. Sony has a great chance right now to take away sales from Canon which has been struggling for the last few years to come up with innovative products. 

Sony's problems in the DSLR market are: Lack of a more complete range of lenses. This usually takes time to build but Sony needs to be agressive here. In-body stabilization of their DSLRs can be a big advantage here.   

Their second problem is marketing: People need to see more and more photographers with Sony cameras. They also need to appeal to young professionals who may not have very strong associations to Canon and Nikon and are willing to try Sony. 

They can be a significant player in the cellphone market too, I think. Traditionally, their weakness has been the software. With Android and Windows 7.5, that is no longer a problem. For years, I used Nokia and Sony phones and always had a soft spot for Sony handsets. 

Hey Jaladhi,

You will see millions of professionals switching from Canon & Nikon to Sony in the next few years if not sooner... David McLain shoots with SONY http://www.davidmclain.com/  also Brain Smith http://briansmith.com/ and Matthew Jordan Smith http://matthewjordansmith.com/  and soon to be a very successful photographer out of Australia will be the new SONY Advocate.... Watch this site among others for a major Press Release....

Sony cameras are getting very exciting.  I was a can not user . They just did not focus well enough, and have to many issues. I switched to Nikon. Very very good tools. -- Sony excites me. I have been watching and I am sure I will be getting a new system, from Sony. My Nikon set up is well over 15 Grand. But I need back up and I need the best I can get. Sony is rocking the World. Call me a moron , call me a MORE OFF,, but dont call me late for dinner !!  Thank you Sony. You really get the best bang for the buck with Sony.