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Sony could exit smartphone and TV sectors to boost profits

by Mark Tyson on 19 February 2015, 13:19

Tags: Sony (NYSE:SNE)

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Sony CEO Kazuo Hirai has announced that the company aims to boost its operating profit by 250 per cent between now and 2018. The key strategic focus of its growth plans will be concentrating upon its entertainment, PlayStation and camera sensors businesses.

Despite the sales of its Xperia smartphones picking up in the last quarter, increasing from 10.8 million to 11.9 million in the quarter to 31 December 2014 year-on-year, the Japanese firm is still expecting to lose money on a net basis for the sixth time in seven years. This is the main reason behind the electronics giant's decision to no longer pursue sales growth in the cut-throat smartphone and TV sectors, where it has suffered competition from cheaper Asian rivals and industry leaders including Apple and Samsung.

"The strategy starting from the next business year will be about generating profit and investing for growth," said CEO Kazuo Hirai, according to Reuters. He added that the firm would not "rule out considering an exit strategy" for its smartphone and TV units, confirming the possibility of selling or finding partners in these struggling sectors.

Favouring more profitable and secure markets, Sony will focus its spending on its profitable camera sensors, videogames and entertainment businesses and it would allow these units to become more autonomous. Sony aims to reach its goal of posting an operating profit of at least 500 billion yen ($4.2 billion) for 2017/18, a 25-fold increase over its current financial performance of 20 billion yen forecast for the year ending 31 March. To do so, the company has already sold off its personal computer division, and cut thousands of jobs, most recently over 2,100 jobs in its smartphone division, as part of a restructuring plan lead by Hirai.

Sony hasn't yet thrown in the towel concerning smartphones. The firm will be present at the MWC 2015 but whether it will be revealing/launching any Xperia Z4 handsets remains to be seen. GSM Arena sources are pointing to a summer release schedule for the next range of Xperia devices.



HEXUS Forums :: 22 Comments

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Not sure about phones but they might as well leave the TV market.

For years now they have been buying others tech and slapping them in their own cases, overpricing them and not selling many. It's been a LONG time since Sony made what I would call proper HT equipment.
Isn't their playstation division a big financial blackhole for them?
shaithis
Not sure about phones but they might as well leave the TV market. For years now they have been buying others tech and slapping them in their own cases, overpricing them and not selling many. It's been a LONG time since Sony made what I would call proper HT equipment.
Problem is that if they leave the TV market then surely their “market profile” is going to take a big dip. And that'd seem to pretty much leave the TV market to LG & Samsung then - the latter not a company who's TV products I've got much liking for, with all the ones I've seen have had over bright colours (aka “clown-vision”) and either horribly oversharpened or blurred (depending on model).

I'd have no problem with them leaving the smartphone market, and perhaps focussing instead on making Ara modules. In the early Android smartphone days I was a big Sony Xperia fan, but all the “Z” models have been pretty awful looking, unless techo-Bauhaus is your “thing”.

One thing though - are they keeping the Alpha etc camera lines going? From what little I've read, the consensus seems to be that these are actually pretty good.
Hmmm. They definitely need to leave the TV market. They use to be good and I still like my budget 5 year old Sony LCD tv but the latest models have been mediocre. Regarding phones my wide has an original Z that is coming up for replacement. Its been ok however the software updates have been hit and miss. I think it would be a shame to see another competitor leave but understand why they would. Personally I'd stop with all the watches and the just launched smart glasses and just concentrate on making a decent phone with a decent camera…
crossy
One thing though - are they keeping the Alpha etc camera lines going? From what little I've read, the consensus seems to be that these are actually pretty good.

It may be significant that you pick out the Alpha SLRs, which started as Minolta Dynax and go back 30 years to the Minolta 7000 and the first AF SLR system as a standout product rather than anything Sony have developed themselves. How far do Sony seem to have fallen from the days when almost any new consumer technology seemed to be preceded by the word Sony; Walkman, Trinitron, Handycam, Betamax, Video 8, DAT, MiniDisc, and Discman spring to mind?