Sony’s First-Quarter Savior: The Smartphone

After a few tough years, Sony, a company once synonymous with innovative consumer electronics, appears to be on the rebound. The apparent engine of its turnaround? The smartphone.

Reporting earnings for its fiscal first quarter ended in June, Sony posted a modest profit of $35 million, an impressive recovery from the ugly loss it posted for the same period a year earlier. And it attributed that turnaround to two things: A favorable shift in foreign exchange rates and brisk smartphone sales.

Evidently, the Xperia A, which Sony touts as the most popular smartphone in Japan, and its counterpart, the Xperia Z, have met with some reasonable success, driving what the company describes as a “significant increase in unit sales” of its Android smartphone portfolio. Sony sold 9.6 million smartphones during the quarter, a big improvement over the 7.4 million it sold a year ago.

Those spiking sales, and the rising average device selling price associated with them, helped Sony’s mobile division post a profit of $60 million. That’s a far better showing than the $28.1 million loss the company turned in for the year-ago period, and a trend that its leadership hopes will continue.

“In smartphones we had turnaround this quarter,” Sony CFO Masaru Kato said during a conference call with analysts. “We made money. And because we focused on high-end models, the average price was higher. And we’ll maintain that status going forward.”

A wise strategy for Sony, which has been struggling to return its electronics business to profitability amid a prolonged decline in sales of video and still cameras, PCs and LCD TVs.