June 24—Sony is developing a new software/hardware image sensor subscription program. According to Yahoo! Finance, the electronics giant is launching the initiative to stabilize its chip segment revenue.
Hideki Somemiya, the firm’s semiconductor division head, believes his unit will become a solution provider.
Sony’s Forthcoming Imaging Sensor Subscription Service
Although it is still in the planning stage, Sony leadership has some compelling ideas regarding its chip/software program. The conglomerate wants to sell customer subscriptions to individual, application-specific platforms instead of stand-alone semiconductor products. The company pointed to its recently unveiled IMX500 edge image sensor as a template for its new service.
Launched in collaboration with Microsoft, the system-on-a-chip can take 4K, 60 FPS footage at 12.3-megapixels, and perform identification and tracking tasks. As the IMX500 is designed to work with Azure, it can serve as the backbone for an Internet of Things (IoT) monitoring system. As such, the solution could empower a cashierless store or handle product quality assurance in a smart factory.
Right now, Sony is forming partnerships and making strategic purchases to enhance its software competencies. Eventually, the company wants to provide clients with an offering that includes seamless digital support and regularly upgraded high-performance chips. The brand understands the disruptive nature of the initiative and expects it will not generate revenue until it reaches scale.
Why Sony’s Hardware/Software Offering Might Take Off
On its face, Sony’s subscription sensor service is not just a big swing; it is a risky bet. In 2019, the Japanese corporation generated ¥770.6 billion ($7.22 billion) in semiconductor revenue, a year-over-year improvement of 6 percent. By changing the way it sells components, the firm could undermine a proven business model.
That said, the company found tremendous success initiating a product-to-services transition in its gaming division.
Sony’s PlayStation unit used to make money by selling consumers consoles and discs, but now it derives income from system, software, and subscription purchases. For $59.99 a year, players get online access to a revolving selection of free popular titles via PlayStation Plus. Because the coronavirus pandemic prompted a spike in gaming platform usage, the corporation’s service now has 40 million subscribers.
Thanks to its subscription offering, PlayStation does not have to subsist on weak, lame-duck product sales.
In addition, Somemiya said most of the company’s chip revenue presently comes from five corporate clients. But its software/hardware package would appeal to a wide array of retailers, manufacturers, and warehouse owners, among others.
Indeed, while Sony makes billions as a semiconductor supplier, it could become a trillion-dollar sensor ecosystem facilitator.