I suspect that Sony Corporation (ADR) (NYSE:SNE) will market these devices together, and consumers will realize that smart watches are not simply superfluous and redundant luxury items, but rather useful peripherals for inconveniently large (but desirable) phablets.
Again, Apple Inc. (NASDAQ:AAPL) hasn’t shown any interest in phablets yet, although several analysts have predictedthat the company could be forced to release one soon. As I mentioned in a previous article, this would be a dangerous move that could cannibalize sales of its iPhones and iPads, which comprise over three-fourths of its top line.
Is Sony poised to make a comeback?
As a company, Sony still has some major problems. In fiscal 2012, Sony’s troubled Home Entertainment & Sound segment reported a 22.5% decline in sales, as it continued ceding market share in LCD TVs to Samsung and LG Display Co Ltd. (ADR) (NYSE:LPL). Sales at its game division also dropped 12.2% as consumers awaited a new generation of consoles, led by its Playstation 4 and Microsoft Corporation (NASDAQ:MSFT)’s Xbox One.
However, sales at its mobile division rose 102%, thanks to the success of its Xperia smartphones and tablets. Its financial arm and movie studio segment also reported 15.6% and 11.4%. revenue growth, respectively, and were the company’s most profitable business segments.
In other words, Sony’s steady growth in smartphones, movies and financial operations could eventually offset its losses in televisions. The release of the PS4 could also reverse losses in its gaming segment, and sales of smart watches might eventually take off along with the increased adoption of phablets. If the PS4’s “second screen” features prove popular, gaming and mobile segments could also rise in tandem.
Is Sony the next Apple?
Investors should remember that Apple Inc. (NASDAQ:AAPL) remained stagnant for a long time before rising to its current valuations. I believe that Sony Corporation (ADR) (NYSE:SNE) could turn around soon, if sales of its mobile devices continues to soar. Currency impacts and a rapidly shifting marketplace could prove difficult for Sony to navigate, but at least it is trying very hard to stay on top of the game. I’m beginning to doubt that the same can be said about Apple.
The article Is Sony the Next Apple? originally appeared on Fool.com and is written by Leo Sun.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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