Aerial pursuit of profit Going aloft together could be risky business for SONY (NYSE: SNE) and privately held ZMP Inc. because neither have experience with drones.

That, however, is exactly the plan according to their very interesting press release: SONY Mobile, the wholly owned SONY subsidiary formerly known as SONY Ericsson, is venturing with ZMP: ?The two companies will jointly found ?Aerosense Inc. [SONY 51 percent/ZMP 49 percent],? in early August 2015.? They intend to be doing business in 2016. Japan?s ZMP, Inc., is best known for wheels-on-the-ground robotics with its RoboCar? SONY’s robot history begins and ends with AIBO (Artificial Intelligence Robot; “pal” or “partner” in Japanese). Discontinued in 2006. The bravado of this escapade is intriguing; the revenue potential from it all could be breathtaking. Following the image sensor biz SONY and ZMP aren?t strangers; they have history together. This past February, SONY got into the autonomous car business with a small investment of $842,000 for a two percent stake in ZMP. That investment gets SONY into using its image sensors for land vehicles; already a mega business that grows exponentially with each new-car model year. But why stop there when the sky?s the limit? SONY?s CEO Kazuo Hirai seems ready to take the risk. He feels sensors and other components, plus the gaming division, and Sony Pictures & Music, could, by March 2018, generate an operating profit of about $4.2 billion. SONY sorely needs to hook up with something anywhere and very soon to turn a profit. Although reporting a 6 percent sales increase in 2014-15, the company also reported its sixth year of loss in the past seven years, announcing a deficit of $1 billion for the financial year ending March 2015. The new SONY venture with ZMP may well become part of a return to profitability. ?Helped by booming sales of digital image sensors for Smartphone cameras,? Sony says it expects an operating profit of $2.7 billion for the current financial year, which ends in March 2016. Benefits of a cash cow always help SONY may well have its share of business problems in electronics but not when it comes to image sensors, owning as it does some 40 percent of the world market. The new (shipped in April 2015) Exmor stacked CMOS imaging sensor (21 megapixels) for higher image quality and tracking of fast-moving subjects is just the latest in its industry-leading sensor lineup. Sony has twice purchased more factories to boost CMOS sensor production as current demand is expected to outstrip supply within two years. According to CNBC, the company is counting on the “boom in Smartphones and the market’s voracious appetite for megapixels?vital to better quality video calls and ?selfies??to sustain the double-digit revenue growth in its image sensor business.” Revenue for image sensors in 2014 was $3.5 billion, up 16 percent from the year previous. SONY?s brand is on the front and back sensors in Apple’s iPhone 6 models; those sensors earn approximately $20 for the company for each iPhone sold. To get an idea of what twenty bucks a phone means for SONY, the iPhone 6 and 6 Plus have sold an ?astounding 74.5 million iPhones during the first quarter of the company?s fiscal 2015 year.? With Samsung now producing its own image sensors (Galaxy 4 last to use SONY sensors), it would be exquisite timing for SONY to now replace that lost mega contract with something equally as lucrative, and then to double down on that by pioneering a brand new business in a brand new industry: drones. Aerosense could make business sense The Aerosense joint venture will take advantage of SONY?s camera, sensing, telecommunications networks, and robotics technologies (from AIBO days) and yoke them to ZMP’s expertise in robotics technologies, which have so far been limited to ground-based vehicles. The big jump for ZMP will be to develop autonomous unmanned aerial vehicles, and to do it by 2016. A non-trivial task. While airborne, SONY?s 21 megapixel image sensors will come in very hand for ultra-sharp detail of aerial imagery for measuring, surveying and inspecting; data from those drone flights will then be transferred to and processed in the Cloud. There’s a nice package of services there that could become a great business with tons of upside. The myriad uses of drones have yet to be even partially imagined, but undeniably ?to see? and to record what?s seen has enormous advantages. To inspect bridges and buildings for signs of structural defects; farmland and forests surveyed for pests, growth, irrigation and fertilizer needs; construction projects, shipbuilding, oil rigs, the list is near limitless. Of course, if the new venture intends to realize any success at all, it first needs to go airborne in order to get SONY?s sensors off the ground. Then too, the world?s airspace is already crowding up with drone developers and their aircraft, which all need ?to see?. Aerosense could fail and SONY could still succeed.