Sony Spins Off Highly Successful Image Sensor Division

Sony hasn’t exactly had much luck in the red hot smartphone market (look no further than Verizon’s decision to ditch the Xperia Z4v), but the company has no trouble getting its image sensors into the smartphones of its competitors or in point-and-shoot and DSLR cameras. In fact, Sony’s image sensor business has been booming for years, and as a result, Sony plans to spin it off into a new company.

Sony Semiconductor Solutions will capitalize on past growth and huge that have been made in R&D investments (over $1 billion this year alone) and its long line of customers that depend on its image sensor solutions. Spinning off the unit also will have the added benefit of bringing more accountability to underperforming divisions under the Sony umbrella; divisions that have been propped up for far too long with the profits reaped from the image sensor division.

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So just how profitable are Sony’s image sensors? Sony sensors are estimated to be present in roughly 40 percent of all smartphones sold worldwide in 2014 according to The Wall Street Journal. Sony’s image sensors can be found in the Samsung Galaxy S6 family of flagship smartphones and even in Apple’s iPhone 6/6 Plus (and most likely the new iPhone 6s and 6s Plus), despite the fact that Apple won’t publicly give Sony any credit for its fantastic image quality.

If we look at Apple’s fiscal Q3 alone, the company sold an astonishing 47.4 million iPhones. One analyst reckons that Sony is pulling in revenue of $20 per iPhone sold — both the rear- and front-facing cameras are Sony parts. And given how ruthless Apple is with cost cutting when it comes to its suppliers, its stands to reckon that Sony may even be pocketing more from its various other OEM customers.

Sony says that its new company will operate “alongside existing Sony group companies” when it commences operating on April 1st, 2016.

The pressure is on Sony’s mobile division now that it can no longer duck for cover under the cold hard cash showered upon its by image sensors. Can products like the Xperia Z5 Premium get Sony back on track, or will it drop kick its Xperia smartphones and tablets like it did with the storied VAIO franchise?