Sony's mobile business in red

Sony is going through some troubled waters at the
moment and it doesn’t seem as if the immediate
future looks much better. Earlier this year the
Japanese electronic giant posted a net loss of over $1
billion for its 2013-2014 financial year, which ended in
March. However Sony forecast that it would sell some
50 million mobile phones from April 2014 to March
2015. Unfortunately things didn’t go as expected and
in September the company adjusted its forecast and
lowered its sales target by some 7 million, to 43
million units.
According to the Wall
Street Journal, Sony is yet
again preparing to reduce
its smartphone sales
forecast by several million
units. It is believed that
Sony intends to reduce its
presence in many of the
world’s emerging markets,
especially in China. This means that Sony will reduce
or stop making altogether entry-level handsets. It
seems that Sony has decided that introducing entry-
level models for emerging markets was a mistake.
Although the Xperia brand will remain core to Sony’s
smartphone business, the brand has been struggling
against cheaper handsets from Chinese OEMs. Sony’s
Chief Financial Officer Kenichiro Yoshida said that the
smartphone business unit will focus on high-end
models and won’t seek a major share of the global
market.
Sony isn't the only one feeling the pitch.
Last month Sony released more bad news for investors
when it announced it would write down $1.68 billion
off the value of its smartphone business. It also
lowered the earnings forecast for the current business
year to a loss of over $2 billion. Sony isn’t the only
one feeling the pitch. HTC is in the middle of a turn
around after a period of loss making, and Samsung is
expecting its Q3 profit to plummet 60% compared to
last year. However some companies are managing to
do well. LG is expecting record sales this year, while
Xiaomi has just taken over the top spot in the highly
competitive Chinese market.
Sony will hold a meeting with investors in November,
where it will reveal its updated smartphone business
plan. If you want to know more about why Sony’s
mobile business is doing so badly then read our very
own Robert Trigg’s excellent analysis.