Sony prepares to exit the phone business as high-end focus fails

image

Fiercewireless reports that Sony is preparing to either sell its phone business or take on a strategic partner  following the failure of a focus on high end handsets to revive the business.

"Electronics in general, along with entertainment and finance, will continue to be an important business," Sony Corp CEO Kazuo Hirai told reporters last week, according to Reuters. "But within that there are some operations that will need to be run with caution–and that might be TV or mobile, for example."

"No business is forever," Reuters quoted one source as saying, adding that "every segment (at Sony) now needs to understand that Sony can exit businesses."

Since 2012, Sony has been working to revitalize its smartphone business with a focus on the high end, highlighted by the company’s lineup of Xperia-branded phones.

Strong competition by Samsung and Apple at the high end and rising stars like Huawei and ZTE on the low end however left them very little space to manoeuvre.

Sony expects to ship 41 million smartphones in its current fiscal year, which ends at the end of March 2015, down from their earlier estimate of 43 million units in July and 50 million units in April. In late October, Sony booked an impairment charge on its mobile business of around $1.5 billion (¥176 billion).

Sony is now forecasting a $1.9 billion net loss for this fiscal year, which ends in March–and the company said it will suspend dividend payments for the first time.

"Our urgent task is to make the business profitable even if we face declines in sales by 20 percent or 30 percent," Hiroki Totoki, the recently appointed chief of Sony Mobile Communications, explained in November, according to the Wall Street Journal.

"The mobile and TV businesses both require a drastic overhaul," warned Citigroup analyst Kota Ezawa, in comments to Reuters. "Without drastic reforms such as joint ventures or alliances, they will both be in the red three years from now."

Does Sony’s plight make our readers rethink our demands for more high end Windows Phones from Microsoft?

Some links in the article may not be viewable as you are using an AdBlocker. Please add us to your whitelist to enable the website to function properly.

Related
Comments