Linked by Thom Holwerda on Thu 1st Aug 2013 09:00 UTC
PDAs, Cellphones, Wireless Like LG, Sony's smartphone division is now also doing quite well:

In the three months between April and June of this year, Sony saw both a "significant increase in unit sales" of its Android smartphones and an improved average selling price per handset. That's at the heart of the company's improved profitability.

The common parlance that only Samsung is profiting off Android is, as I've said before, simply no longer true. All it took for companies like LG and Sony to become profitable with Android is to, you know, stop making crap phones, and start producing good ones.

Shocker.

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How
by Deviate_X on Thu 1st Aug 2013 12:29 UTC
Deviate_X
Member since:
2005-07-11

The real question is: how did Sony ship 10 million very expensive smartphones and barely avoid a loss, while Samsung and Apple are counting their profits in the billions?

Sony would have had a better return if they had put the money in some random common high street bank offering a below inflation interest rate. If you aren't beating inflation your actually making a loss. This is the reason people say that only Apple and Samsung are making meaningful profits.

Edited 2013-08-01 12:34 UTC

Reply Score: 4

RE: How
by dsmogor on Thu 1st Aug 2013 13:57 in reply to "How"
dsmogor Member since:
2005-09-01

One could alse note that they are all simply hurting from paradigm shift brought by Apple.
W/O Android they would all either be out of smartphone business or additionally paying licence fees (which would probably be higher due to lack of competition) to MS.

You don't count the the indirect benefits in gaining experience in building competitive touch phones, customizing the OS, integrating with their own value added services.

They are still in the game, that's what counts.

Reply Parent Score: 3

RE[2]: How
by jared_wilkes on Thu 1st Aug 2013 15:03 in reply to "RE: How"
jared_wilkes Member since:
2011-04-25

...which is miles from the thesis of Thom's article.

If the article was, "Sony avoids dying because of Android," I'd say this quarter's financials are far from proving that, but that's not remotely the point.

So it's not an argument worth addressing (one that wasn't raised and is a hypothetical based on an alternate history -- comparing how they'd perform if Android did not exist).

Edited 2013-08-01 15:05 UTC

Reply Parent Score: 2

RE[2]: How
by tanzam75 on Thu 1st Aug 2013 18:20 in reply to "RE: How"
tanzam75 Member since:
2011-05-19

They are still in the game, that's what counts.


For-profit companies are not in business to stay in the game. They are in business to make a profit. This is what distinguishes them from non-profit organizations. At least, that's the theory.

So yes, the smartphone makers can stay in the game. But to what end? If they don't make a real profit, then what did they invest all that capital for?

It is quite possible for an industry to reach a competitive equilibrium in which most of the players never make any money. The American airline industry is the classic example. Over its entire history, aggregate industry profits have been negative.

Granted, some of the smartphone companies have no choice but to stay in the game. For example, if you take away smartphones, then there's basically nothing left of HTC. But others -- like Sony -- do have a choice of where to deploy capital. Sony consistently makes money on life insurance.

The only reason to stay in an unprofitable market is if you think the present situation is temporary. The problem is that all the smartphone makers are staying in. This competitive pressure drives prices down, and ensures that most of them won't make any money.

Edited 2013-08-01 18:30 UTC

Reply Parent Score: 3