Sony produces some of the most talked-about and innovative cameras. Yet the company is worth practically nothing. Credit ratings agency Moody’s — right, one that missed the U.S. suprime housing bubble — downgraded Sony’s credit rating for corporate bond status to junk. With stable outlook. Meaning Sony cameras won’t disappear from the face of the earth overnight. Yet Sony, says Moody’s, faces intense global competition, rapid changes in technology and product obsolescence:

Sony’s profitability is likely to remain weak and volatile, as we expect the majority of its core consumer electronics businesses — such as TVs, mobile, digital cameras and personal computers — to continue to face significant downward earnings pressure (…)

Moody’s is particularly concerned about weak earnings in the Devices and the Imaging Products & Solutions segments as the rapid decline in demand for compact digital cameras continues to alter the markets for such products and associated imaging sensors.

It’s serious. A billion in losses and 5,000 said to be cut in layoff. TBH, Sony’s a mom-and-pop giant offering anything that’s remotely related to technology and entertainment. Cameras and sensors are part of Sony’s healthier business ventures. They’re in talks to sell their personal computer unit, including Vaio.

It’s highly unlikely that Sony’s getting rid of its imaging division — in autumn 2012 they acquired a $645 million stake in competitor Olympus and the company makes inroads into established photography segments with their rather revolutionary large sensor products, such as the RX1, A7/A7R, A99 and RX100 II — not to forget the RX10 which will be reviewed here soon.

Whilst many ignore that cameras don’t grow on trees, they’re not a commodity. Cameras are made by companies that must turn a profit. With the exception of Canon and Nikon no camera maker currently is in the black. All of Sony’s above mentioned cameras get favorable reviews while they don’t sell in sufficient volumes at prices to pep up Sony against the global market currents.

Relative to cash flow, Sony has a lot of debt. So the junk credit rating is not just a financial analyst’s hangover. Over half of Sony’s long-term capital is borrowed.

Fact is, most people buy Canon or Nikon. So should Sony spend even more in camera R&D, manufacturing and promotion? The world buys fewer cameras — and the high-end sector we all cherish isn’t as profitable as Sony wishes.

Sony made clear they’re in imaging for the long run — but the law of economics can’t be ignored forever. Or maybe their stuff is too expensive? Luckily buying a camera is not an investment, so why worry? Right, we invest in systems.

I remain convinced that Sony’s imaging business is a success story that’s just about to begin. Can’t call a Sony camera my own, but wouldn’t be surprised if Sony is the world’s camera maker no. 2 in a few years down the road.

Don’t forget, Sony is the world’s biggest sensor manufacturer and sells a lot of sensors to other companies. Even if you don’t buy a Sony you might buy a Sony. That — and innovation — is what’s keeping them in cameras for quite some time to come.