In the wake of forecast increased losses, Sony also announces job cuts at mobile unit

Sony has been navigating difficult waters lately, and when you look at the legendary conglomerate’s complete portfolio of products and services, it is puzzling. Not even a generation ago, Sony was part of that short list of premium Japanese brands, the “go to” in the consumer electronics space.

Competition has been fierce however, and Sony has not been able to break through to find any clear road for many of its products, but particularly with its impressive line of Xperia Android powered smartphones, which are not getting traction in the marketplace.

A few days ago, Sony announced that it expected its losses for the fiscal year (which ends March of 2015) to widen significantly. When a forecast like that is being made with more than half the year left, it does not instill a sense of confidence.

Sony’s CEO, Kazuo Hirai, says he wants to “rebuild” the electronics unit, also says that options are dwindling. The company spun off its money losing TV unit, and sold off its personal computer business, the latter of which is a sector that is not contracting as a whole as badly as once feared. Sony has also been methodically cutting its workforce while it attempts to rally a comeback.

With the most recent earnings forecast, it is evident that the comeback efforts are struggling to say the least. Now Sony’s mobile unit will see roughly 15% of its workforce, about 1,000 jobs, cut from the ranks. On top of that, Sony also said that it would be paring back its smartphone line-up to cater to the higher-end markets.

That may seem counter-intuitive given the massive growth in mobile has been in developing markets where low prices win the customers, but Sony has been ineffective competing with the huge swath of Chinese brands which undercut not only Sony in price, but pretty much everyone else too. On the high-end, you can check out any number of our reviews, and it is plain to see that Sony knows how to make appealing devices.

Unfortunately, Sony cannot gain a bigger foothold in developed markets without the United States, where virtually none of its high-line Xperia smartphones are sold through any major wireless carriers.

Kunimasa Suzuki, head of Sony’s mobile unit, reaffirmed Sony’s commitment to the US market, “It is obvious for us that we need to keep investing into the U.S. market. Step by step, I think we will be able to grow our U.S. market share.”


source: The Wall Street Journal

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76 Comments

75. lallolu

Posts: 734; Member since: Sep 18, 2012

Sony phones just got better with the Z2. Battery time which is one of the most important feature on a phone was not priritized by sony. People also complained about the viewing angles which was not stellar but sony thinks because a few said it does not bother them, then they should not care about it. Camera was also not very good. I believe from Z2 onwards, their luck will turn for the better. Even I am planning to buy a Z2 or Z3 the next time I buy a phone. They are now on the right track I believe.

72. Af1rPA

Posts: 712; Member since: Jun 12, 2014

Im not suprised. Some of those mobile execs need to be punished. They lost money due to horrible decision making. Good luck next year Sony.

70. cybertec69

Posts: 32; Member since: Aug 17, 2014

How about making their phones available in the US, that would have been a good start.

69. TMach unregistered

Haters are always gonna hate but Sony is a necessity. Apple, more particularly Steve Jobs was inspired by Sony! The company designs and makes some great products but marketing is a complete fail and is one area where Sony needs to up its game and be more aggressive! Ditch the mid rangers and focus on an exquisite top ranger, timely updates. Good to hear Sony is contracting its mid range phones and focussing on its top rangers. Marketing marketing and more marketing. Focussing on the American market might also help. Awaiting my Z3 in Green....looks so cool. Trouble is sh**p will rush out and buy a bit of glitz instead even when that glitz is just catching up to 2012 specs! The power of marketing, eh!

68. magnum44 unregistered

I guess that means no Experia Z Ultra 2 (just like there is no more Vaio laptop Z series). These Japanese brands are all in a spiral after Japan's second lost decade ... and China and South Korea like two massive black holes help pin them in that situation. The Japanese economy has been in doldrums for almost 25 years now, and they seem unable to figure it out this time. The Vietnam's war helped their economy before, but what they need this time ? ... until then, bring in the 3rd lost decade.

67. S.M.Talha

Posts: 70; Member since: Aug 27, 2014

I want a device which have Great Performance like Apple. Premium design like Sony. Great Quality like Nokia. Great price like Nexus devices. Great display like -----i dont know this one so maybe Samsung.

60. InspectorGadget80 unregistered

Sony really needs to fire their marketing team and ceo. and learn to compete here in the u.s. that's the only way their sales will SKY ROCKET put it on every u.s. carrier.

57. Totse2k15

Posts: 479; Member since: Feb 11, 2014

Best of luck to those people.

56. Chuck007

Posts: 1420; Member since: Mar 02, 2014

Would suck to see Sony only making movies and Playstations. Cause that's where this seems to point where it's headed. ..and this is coming from a Sony fanboy.

52. mecool

Posts: 7; Member since: Aug 13, 2013

bad pricing of mid rangers.. is the biggest mistake of sony..........

55. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

And not using S600 on thier midrange phones.

42. phantom_six_man

Posts: 82; Member since: Feb 12, 2014

sony is doing good on high end phones,they only die on their low-midrage phones,keep doing the 6 cycle upgrade then stop making low end and midrange phone,then let the consumer finish the job :)

41. StraightEdgeNexus

Posts: 3689; Member since: Feb 14, 2014

Bad guy Sony :( Who cares though, I'm just two months far from getting the z3 compact lol.

38. JMartin22

Posts: 2424; Member since: Apr 30, 2013

And despite these losses, it will be another year of the same exact product portfolio line ups, same release cycles, and ultimately, another fiscal year loss of profits. Sony doesn't learn that it's going to have to change the trajectory of how it engages its mobile handheld business, otherwise, their mobile division is just going to hinder their cause. Like someone else mentioned, the Xperia line-up of phones isn't good, merely "alright" - which isn't sufficient enough in a cutthroat industry such as this.

39. Amir1 unregistered

Xperia phones merely alright? what are you smoking? the z line since 2013 are the best flagship phones ever as far as i'm concerned, especially z ultra, z1c, z2 and now z3 and z3c. they all got fantastic reviews. the problem of sony is lack of availability, lack of marketing and lack of competitive low-mid range phones.

66. JMartin22

Posts: 2424; Member since: Apr 30, 2013

Tech review sites are often out of tune with mainstream consumers and if you say their products are the best, that's really marginalized fanboy talk, even if it is your opinion. You can sit there and lash out at me all you want, but this is just the open market speaking. They aren't doing well because people eschew them for other options

36. droidmanX

Posts: 43; Member since: Jan 25, 2014

Sony is a very good company. They make excellent TVs, headphones, speakers, 2in1s. In mobile phone business they make some very good phones. Unfortunately, Sony suffers from same problem like everyone else. Pricing the products. Sony, HTC, Samsung, LG all have a bad habit of over pricing the products more than their worth. Xperia Z2, and Z3 are wonderful phones but almost always over priced. Due to this over pricing, instead of 100 people buy the same phone only 30 or 40 will buy and rest will go to companies which offer similar or better for lesser price. You have to know the pulse of the market and price it accordingly. IF you want many people to buy your phones then put up a price tag where ALMOST everyone can reach. But if you price it in 700-800$ range, then the result is a nosedive. This article and many other articles are bitter truth. Mobile phone market is very competitive. Many companies have entered the android market. It is high time these companies learn that smart pricing coupled with good hardware, features, software lead to good sales. There companies know everything and repeat the same mistakes over and over again. They are foolish.

35. Spedez

Posts: 542; Member since: Aug 29, 2014

"Xperia Android powered smartphones, which are not getting traction in the marketplace. " That's because they aren't actually that good. They are just...okay.

34. Taters

Posts: 6474; Member since: Jan 28, 2013

The brand they used to rely on is no longer Apple level which is what it pretty much comes down to. They had their glorious run and their brand is played out. Just like what happened to Nintendo and what will happen to Apple.

40. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

Every Android OEM outside of China has gone through it, or is going through it (Samsung has already started their slide), yet Apple hasn't. So, did you mean "what will happen to Apple after every major Android OEM has crashed and burned, leaving only cheap Chinese knockoff OEMs"? If so, it shows you still don't understand business because the Chinese companies are playing the same race to the bottom, only faster, and they pose as much threat to Apple as HTC, Moto, LG, and Samsung have, which looks to be none at all.

73. Taters

Posts: 6474; Member since: Jan 28, 2013

Not at all. Samsung's approach is very sustainable. The more powerful the hardware, the less touch wiz sucks. They are only going up as hardware increases. With Apple, IOS operates relatively the same on any hardware. Once their mojo is gone, kaput. See ya. Like I said before. They used up their final hand, the bigger screen and the watch. They are toast soon. Samsung can play it anyway. Go for flexible screen market, camera sensors, GPU, CPU, band memory. Whatever floats their boat.

53. Ninetysix

Posts: 2966; Member since: Oct 08, 2012

I think you mean to say Samsung and Nintendo? Apple's mobile profits are still going strong. Samsung on the other hand :(

54. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

By providing less features and subpar medicore products. With a high-end price.

74. Taters

Posts: 6474; Member since: Jan 28, 2013

They used their last cards in the bigger screens and Apple watch. What do they have left to play? 6 inch screen and the Apple TV that the big cable companies already buried?

33. adream077

Posts: 15; Member since: Sep 12, 2014

Will the price of xperia Z3 drop because of this ???

30. medtxa

Posts: 1655; Member since: Jun 02, 2014

need more marketing and better strategy

28. JMartin22

Posts: 2424; Member since: Apr 30, 2013

I'm not a fan of Sony. I don't like their phones; but them popularizing water resistance among the industry was something positive I applaud them for; even one of the top players recognized it and incorporated into their high-end product. Also, more competition in the platform space is good. But people aren't buying their phones because they aren't well advertised and because of the reason I listed on behalf of myself.

27. NightSurfer

Posts: 101; Member since: Sep 06, 2014

Android tv from sony will turn the table for its tv division. Ill be forever sony, from psp, tv, headphones, home theather, usb vault, xperia smartphone and music player, i have sony. Soon, ill have ps4 and z3/z4.

25. gazmatic

Posts: 822; Member since: Sep 06, 2012

Sony, HTC (and nokia if they chose android) cant compare to Samsung. Samsung has the "kitchen sink" ideology and it works.

37. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Samsung doesn't give into doing dumb stuff. So they still have a removable battery, a SD card slot, physical buttons, and high RF performance plastic backs. They make the phones easy to repair. And love it or hate it, TouchWiz offers a lot of functionality. Certainly there are some gimmicks that come with it, but there's also a lot of useful features.

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