Sony’s New Space Unit to Use Laser-Based Satellite Communications

Sony (SONY) has formed a new business unit focused on space technology, Sony Space Communications Corp. Founded in 1946, Sony is a Japanese multinational that makes a variety of electronic products and also offers various solutions. 

It will develop and sell devices that enable satellites to communicate through laser beams instead of radio frequencies, according to a Reuters report. 

There are about 12,000 satellites in space and the number is only expected to increase as the cost of launching objects into space continues to fall. With expanding satellite constellations, the use of radio frequencies for communication may face difficulties.

“The amount of data used in orbit is also increasing year by year, but the amount of available radio waves is limited,” Reuters quoted Kyohei Iwamoto, President of Sony Space Communications, as saying.

Sony has already put its laser-based satellite communications technology to the test, and it worked well. The test saw the successful transmission of high-definition image data from the International Space Station to a Japanese ground station. Sony’s technology can facilitate communications between satellites in orbit and between satellites and ground stations. 

Wall Street’s Take

The Street is cautiously optimistic about Sony with a Moderate Buy consensus rating based on two Buys. The average Sony price target of $125 implies 35% upside potential to current levels. Shares have declined about 27% year-to-date.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 91% Bullish on SONY, compared to a sector average of 67%.

Key Takeaway for Investors

The space sector is growing rapidly and presents a huge growth opportunity for Sony as it seeks to diversify beyond its traditional markets. According to Morgan Stanley’s estimates, the global space industry will surpass more than $1 trillion in annual revenue by 2040, up from $350 billion currently.

Read full Disclosure