Why Sony makes money every time you buy an iPhone

April 29, 2015, 2:55 PM UTC
Photograph by Steve Marcus — Reuters

Every time an iPhone 6 is sold, an unlikely company cashes in, according to The Wall Street Journal.

That company, Sony (SNE), provides the image sensors for digital cameras, and it has been quietly bulking up that part of its business.

The newspaper reported the source of income for Sony on Wednesday:

The Japanese company is the world’s largest supplier of image sensors in digital cameras. To meet surging demand, Sony plans to invest $375 million in its image-sensor factories on top of nearly $900 million announced earlier this year.

Sony’s CEO Kazuo Hirai praised the business in a recent interview with the Journal: “Whether it’s a device that goes into other manufacturers’ products or sometimes our own, if there’s innovation there,” he said. “That’s something I get excited about.”

And this is how the partnership with Apple (AAPL) works:

Instead, Sony is trying harder than ever to profit from other companies’ innovations, such as the iPhone 6. Each one contains two Sony-made image sensors and related parts, which generate revenue of as much as $20 per phone for Sony, analysts say. Earlier-generation iPhones had one Sony sensor apiece. The ‘selfie’ craze has strengthened Sony’s grip on the market.

The money made from other companies is a sign of change for the company: “If we’re talking about the organization and our strategies and where we want the company to be next year, two years from now, three years from now,” said Hirai to the newspaper. “Yes, we’re starting to turn the corner.”
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