Sony is in highly loss

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Sony announced last night that it’s spinning off its audio and video divisions, much like it spun off its television division last year. That won’t mean much right now; Sony still displayed interesting new Android-powered TVs at CES, and we’re sure to see new crazy high-end Walkmans and camcorders with Sony branding from the newly independent AV division as well.

But the long-term reality is far more stark: after years of promising “One Sony,” CEO Kaz Hirai appears to be systematically breaking the company up for sale. The VAIO PC division was sold last year and just announced its first hybrid laptops as an independent company, and Hirai told investors that he has to consider spinning off the smartphone business and possibly selling the TV business outright.

According to Hirai, that leaves Sony with three main businesses at its core :

  1. Sony Pictures Entertainment, the hit-or-miss Hollywood studio that just fired Amy Pascal after being hacked to bits at the end of last year.
  2. The PlayStation division, which has so far won the next-gen console race with the PS4 but yet to define a clear mobile strategy; PlayStation Mobile is all but ignored, and the Vita is a beautifully noble failure.
  3. Selling image sensors to Apple for the iPhone.

You read that last one correctly: Sony’s last closely held core electronics business is image sensors, and it’s mostly because Apple uses them in the iPhone. (Sony also supplies sensors for various other high-end phones, but Samsung uses its own chips in the Galaxy S5, and no other company comes close to selling as many phones as Apple and Samsung.) If Apple decides to switch sensor suppliers — or, perhaps more likely, build its own — the third leg of that stool gets kicked right out.

If you’re a PlayStation fan, this is kind of fun: after years of Sony neglecting gaming, former PlayStation head Hirai is ruthlessly eliminating every other division at the company. Revenge!

REVENGE!

For everyone else, this is kind of depressing — Sony was among the first great consumer electronics companies, and now it’s falling apart because smartphones and software completely subsumed almost every device in its catalog. Sony’s phones are generally excellent now, but haven’t seen nearly the kind of traction Samsung’s phones have seen. Sony also made the cardinal error of trying to foist garbage software and services on people. That error is slowly being corrected; most Sony devices now run basically clean versions of Android, and Sony just killed its in-house music streaming service in favor of Spotify. But it’s too little, too late: the customers Sony needs have been buying Samsung products for too long now.

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