Sony Q1 FY20 TV sales are down by 500K
Worst in a decade
With a year-over-year sales trend that’s been down since 2010, a global pandemic that kept consumers away from retailers where TVs are predominately sold, and a spending shift towards mainly in home entertainment, Bravia experienced its worst quarter. During Q1 FY20, Sony TV sales hit 1.5 million, down 500K from the previous quarter.
Sony experienced a similar decline going from Q1 2018 to Q1 2019, so it’s hard to indicate if, with context, namely COVID, this quarter was better than what the numbers show if the trend has been to lose 500K sales in a typical quarter anyways.
That said, this is hardly a good sign as the division continues to bleed sales with no signs of slowing, even prior to COVID-19 bringing the world to a halt. With a raging pandemic (here in the US anyway), continued trade war escalation, and a weakened consumer, predictions for the year will be tough, but there’s a real possibility that Sony only manages to sell 7.5 million TVs in 2020.
Looking at the above chart makes you wonder what the longterm strategy for Bravia is. For years, Sony has maintained the messaging that the decline in sales is part of a grand plan of selling higher-margin TVs (read, more expensive sets) at lower volumes, but it’s unclear how well their strategy is playing out when Bravia, Alpha, and Xperia amongst other electronics they sell are all lumped under “Electronics Products & Solutions Segment.”
That segment reported a revenue of ¥331.8 billion ($3.1 billion) in Q1 FY20, down from ¥483.9 billion in the year-ago quarter and a loss of ¥9.1 billion (-$86 million), versus a profit of ¥25.1 billion in Q1 FY19.
From Sony:
- FY20 Q1 sales decreased 31% year-on-year to 331.8 billion yen primarily due to a decrease in unit sales of digital cameras and TVs.
- The EP&S segment was the segment which was impacted by the spread of COVID- 19 earlier and more significantly than any other segment, but the supply chain has almost fully recovered and, although progress varies depending on product category and region, customer demand is beginning to recover as well.
- We are preparing for potential second and third waves of COVID-19 by transforming the structure of this business into a more resilient one through an overhaul of our operations and further streamlining, as well as enhancement of our ecommerce distribution channels.
- This segment, which will inherit the Sony Corporation trade name on April 1, 2021, is further accelerating its efforts to unify the management of the businesses under its umbrella and is promoting the evolution of the businesses by deploying products and services that enable reality, real-time, and remote activity through our audio, video and communications technologies.
Q1 FY2020 (year-on-year)
Sales: 152.1 bln yen (31%) significant decrease (FX Impact: -9.3 bln yen) ꞏ
- ( — ) Decrease in unit sales of digital cameras, televisions and Audio and Video resulting from the impact of COVID-19
OI: 34.2 bln yen significant deterioration (FX Impact: -3.0 bln yen)
- ( — ) Decrease in sales
- (+) Reductions in operating costs in each of the businesses
FY2020 Forecast (year-on-year)
Sales: 121.3 bln yen (6%) decrease
- ( — ) Decrease in sales in the first quarter resulting from the impact of COVID-19
- ( — ) Impact of foreign exchange rates
OI: 27.3 bln yen significant decrease
- ( — ) Decrease in salesꞏ
- ( — ) Negative impact of foreign exchange rates
- (+) Significant reductions in operating costs, including cost reductions
resulting from restructuring initiatives undertaken prior to FY2020 for Mobile Communications
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