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Sony Posts 10% Profit Rise on Image Sensor Boost

(FILES) In this picture taken on May 9, 2022, the Sony logo is displayed at an entrance of the company's headquarters in Tokyo. (Photo by Philip FONG / AFP)
(FILES) In this picture taken on May 9, 2022, the Sony logo is displayed at an entrance of the company's headquarters in Tokyo. (Photo by Philip FONG / AFP)
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Sony Posts 10% Profit Rise on Image Sensor Boost

(FILES) In this picture taken on May 9, 2022, the Sony logo is displayed at an entrance of the company's headquarters in Tokyo. (Photo by Philip FONG / AFP)
(FILES) In this picture taken on May 9, 2022, the Sony logo is displayed at an entrance of the company's headquarters in Tokyo. (Photo by Philip FONG / AFP)

Sony on Wednesday reported a 10% rise in operating profit in the April-June quarter, beating analyst estimates, boosted by its industry-leading image sensor business.
Profit at the Japanese tech and entertainment conglomerate was 279 billion yen ($1.90 billion), compared with an average estimate of 275 billion yen from seven analysts polled by LSEG.
The impact from foreign exchange and higher sales helped profit at the image sensor business, a major supplier for smartphone makers, roughly triple to 36.6 billion yen.
A sprawling group encompassing music, movies, games and chips, Sony hiked its full-year profit forecast by 3% aided by foreign exchange rates.
Financial markets have been whipsawed in recent days following an interest rate hike by the Bank of Japan and weak labor data from the US that stoked recession fears.
"We are extremely concerned about the sudden fluctuations in exchange rates and possibility of economic downturn, particularly in the United States," Sony President Hiroki Totoki told an earnings briefing, according to Reuters.
The rise in the yen has left investors reassessing the outlook for Japanese multinationals, as the weak currency had provided a cushion for many heavyweight exporters.
Sony's assumed exchange rate for the year is approximately 145 yen to the dollar. On Wednesday, it was trading around 147, but it had been at 38-year lows near 162 at the start of July.
In the first quarter Sony sold 2.4 million PlayStation 5 (PS5) units, fewer than a year earlier, but booked a larger profit from its games business.
The group said in May it expects to sell 18 million PS5 units this fiscal year, compared to 20.8 million a year earlier.
The games industry is grappling with rising costs and weak pricing power. Sony-owned developer Bungie announced last week it is cutting almost a fifth of its workforce.
Sony's shares closed flat ahead of earnings and are down 8% year-to-date, giving the company a market capitalization of just over $100 billion.

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Technology

Google Has an Illegal Monopoly on Search, US Judge Finds

A close-up shows the Google logo on a smartphone in Berlin, Germany, 07 July 2020 (reissued 05 August 2024). (EPA)
A close-up shows the Google logo on a smartphone in Berlin, Germany, 07 July 2020 (reissued 05 August 2024). (EPA)
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Google Has an Illegal Monopoly on Search, US Judge Finds

A close-up shows the Google logo on a smartphone in Berlin, Germany, 07 July 2020 (reissued 05 August 2024). (EPA)
A close-up shows the Google logo on a smartphone in Berlin, Germany, 07 July 2020 (reissued 05 August 2024). (EPA)

A US judge ruled on Monday that Google violated antitrust law, spending billions of dollars to create an illegal monopoly and become the world's default search engine, the first big win for federal authorities taking on Big Tech's market dominance.

The ruling paves the way for a second trial to determine potential fixes, possibly including a breakup of Google parent Alphabet, which would change the landscape of the online advertising world that Google has dominated for years.

It is also a green light to aggressive US antitrust enforcers prosecuting Big Tech, a sector that has been under fire from across the political spectrum.

"The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly," US District Judge Amit Mehta, Washington, DC, wrote. Google controls about 90% of the online search market and 95% on smartphones.

The "remedy" phase could be lengthy, followed by potential appeals to the US Court of Appeals, District of Columbia Circuit and the US Supreme Court. The legal wrangling could play out into next year, or even 2026.

Shares of Alphabet fell 4.5% on Monday amid a broad decline in tech shares as the wider stock market cratered on recession fears. Google advertising was 77% of Alphabet's total sales in 2023.

Alphabet said it plans to appeal Mehta's ruling. "This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available," Google said in a statement.

US Attorney General Merrick Garland called the ruling "a historic win for the American people," adding that "no company - no matter how large or influential - is above the law."

White House press secretary Karine Jean-Pierre said the "pro-competition ruling is a victory for the American people," adding that "Americans deserve an internet that is free, fair, and open for competition."

BILLIONS PAID

Mehta noted that Google had paid $26.3 billion in 2021 alone to ensure that its search engine is the default on smartphones and browsers, and to keep its dominant market share.

"The default is extremely valuable real estate," Mehta wrote. "Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change."

He added, "Google, of course, recognizes that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues."

The ruling is the first major decision in a series of cases taking on alleged monopolies in Big Tech. This case, filed by the Trump administration, went before a judge from September to November of last year.

"A forced divestiture of the search business would sever Alphabet from its largest source of revenue. But even losing its capacity to strike exclusive default agreements could be detrimental for Google," said Emarketer senior analyst Evelyn Mitchell-Wolf, who said a drawn-out legal process would delay any immediate effects for consumers.

In the past four years, federal antitrust regulators have also sued Meta Platforms, Amazon.com and Apple, claiming the companies have illegally maintained monopolies. Those cases all began under the administration of former President Donald Trump.

Senator Amy Klobuchar, a Democrat who chairs the Senate Judiciary Committee's antitrust subcommittee, said the fact that the case spanned administrations shows strong bipartisan support for antitrust enforcement.

"It's a huge victory for the American people that antitrust enforcement is alive and well when it comes to competition," she said. "Google is a rampant monopolist."

When it was filed in 2020, the Google search case was the first time in a generation that the US government accused a major corporation of an illegal monopoly. Microsoft settled with the Justice Department in 2004 over claims that it forced its Internet Explorer Web browser on Windows users.