Sony’s financial woes have been well-documented over the last couple of years, but the Japanese electronics giant is finally starting to show signs of life, with its TV division recording a rare quarterly profit in almost a decade on the back of its new premium line of ultra high-definition 4K TVs.
This performance helped the company edge back into the black for the first time since 2011, eeking out quarterly profits of 3.5 billion yen for the period from April to June. Undoubtedly, the surprising turnaround of its television arm played a crucial role in this financial development.
Sony has problems all over the shop, but its TV division had notably been struggling for years – in fact, it had lost money for the last nine years in a row, a total of 36 financial quarters until this week’s results. Even so, Sony President Kazuo Hirai has repeatedly stated his ambition to turn things around, and has done so by leveraging the popularity of its Bravia brand and its position as a leader in the development of cutting edge display technologies like 4K Ultra HD resolution. Now, thanks to better-than-expected sales of its high-end Bravia X9 series of 4K TVs, Sony’s TV arm has finally lived up to Hirai’s promises and returned to profitability.
Along with its Japanese rivals Panasonic and Sharp, Sony had fallen victim to a combination of factors that at one stage even led to question marks over the company’s ability to stay afloat. Part of the problem was the global slump in HDTV sales over the last 18 months or so, having previously poured billions of yen into display production facilities – money that was as good as thrown away when prices for flat-screen televisions plunged in the face of falling consumer demand. Add to that the rising strength of the yen itself, which has steadily grown by almost 50% against the dollar and euro during the last four years, and it’s easy to see why Sony has struggled.
Sony has been working hard to reduce its vulnerability to fluctuations in the exchange rate, but nevertheless it will be thankful for the yen’s recent slump. Had it not been for the yen’s decline, the consumer electronics manufacturer would once again have recorded an operating loss.
But the real reason for the company’s fightback has been more to do with its own innovation. Desperate not to lose its leading position in global TV markets, Sony has poured everything into cutting-edge technologies like 4K. Not only has it stolen a march on Korean competitors Samsung and LG by getting its more affordable 55-inch and 65-inch Bravia X9 4K Ultra HD TVs into European and US markets early, it has also been the most aggressive TV maker in the content stakes, establishing a 4K digital remastering studio in Hollywood, and launching its FMP-X1 4K Ultra HD (UHD) Media Player and 4K cloud streaming service to entice consumers.