Sony's Xperia business unit will be downsized in an effort to increase profitability

Sony's Xperia business unit will be downsized in an effort to increase profitability
Sony has confirmed that it will be downsizing its mobile division in pursuit of profits. Over the course of the last five years, Sony’s Xperia line of smartphones has seen a pretty steady decline in sales which has often been accompanied by losses. In a bid to put a stop to this, however, the Japanese giant has confirmed that it will be reducing the focus on its mobile business going forward.

A few years back, Sony Mobile announced plans to downsize the overall scale of the Xperia brand with a focus on profitable devices. This entailed scrapping most of the company’s lower-end offerings and increasing the number of premium models available to consumers, starting with the introduction of the Xperia X series back in 2016. This temporarily provided higher profit margins and allowed for a number of positive quarters. Eventually, however, the division declined back into the red and parent company Sony has now confirmed that the mobile division will once again be downsized in an effort to increase profitability. After all, the Xperia brand bled a total of JPY31.3 billion, or $288 million, during the quarter ending March, while total revenues have been on a constant decline over the past twelve months.

Now, despite partially blaming foreign exchange rates for the unit’s loss, Sony is expecting the downsized business to make significant savings in terms of operating costs. Nevertheless, the focus will continue to be on premium devices, suggesting that the company’s budget Xperia L series could be scrapped entirely, while certain Xperia XA-branded units may also be at risk, with only the Xperia XZ lineup guaranteed to remain in production.

Going forward, Sony is aiming to ship just 10 million Xperia units in the fiscal 2018 year, which ends March 31, 2019. This will mark a significant reduction over both 2017 and 2016, which saw the brand ship 13.5 million and 14.6 million devices respectively.

source: Sony

FEATURED VIDEO

52 Comments

1. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Well if they keep releasing hardware and software crap this will happen. Haven't had a decent compact since Z5c and the other phones are just derivative garbage.

2. Xtraflossy

Posts: 31; Member since: Mar 13, 2018

I wouldn't call their offerings "crap". Ugly, overpriced... yes. I use 2 Sony products daily, a phone and tablet. Solid devices. Not so much looker's , but they do cook n clean :)

10. Ciro1900

Posts: 591; Member since: Dec 17, 2017

Any xperia laughs in the face of your obsolete mobile

13. Seany

Posts: 94; Member since: Sep 28, 2012

Nothing bad about Sony software it is well optimized,smooth and slick one of the best in the market & their updates are great too better than most. Their hardware is also excellent but Sony has just been slow to keep up with trends etc. Nothing 'crap' about their software etc

25. Skizzo

Posts: 403; Member since: Jul 14, 2013

I agree that calling Sony "crap" is off base, since their product line varies from good to great (or amazing in case of PS4). Their software is generally pretty good as it sticks pretty close to stock Android, HOWEVER, their camera software needs work. It has gotten better, but the fact that most manufacturers use Sony sensors yet produce better pictures than Sony themselves speaks volumes about Sony's post processing software, and camera integration in general.

39. Finalflash

Posts: 4063; Member since: Jul 23, 2013

When you're doing stock Android, what else is there to do than camera. If that sucks then their software sucks (the rest is Google's effort). The hardware is crap because it's behind the trend and usually offers nothing unique. I was a fan while I had the z5 compact, but since then just lost faith waiting for another decent compact.

46. romeo1

Posts: 824; Member since: Jan 06, 2012

Sony doesn't do stock android it's clos to stock but has it's own extras. Also if it where googles effort the pixel would be faster than sonys flagship device. The optimisation sony does is only rivaled by oneplus the rest is slower.

18. Sunbae-min

Posts: 135; Member since: Mar 25, 2018

It's almost there: Quitting its smartphone division. Sony, just like other Japanese companies aren't relevant and significant in high-end tech anymore because they can't catch up with big players Samsung or LG in term of innovation. Being Japanese brands are what they proud about and they wouldn't improve themselves, they just too much believe in themselves. They refuse to accept the fact that they are the losers in 21st century both in economy and power.

20. Ciro1900

Posts: 591; Member since: Dec 17, 2017

Samsung It is a brand of poor people who can not buy Sony tv or LG oled buy Samsung TV, they can not buy Siemens washing machines buy Samsung machines, those who can not buy iPhones or Xperias buy xamfung

26. haikallp

Posts: 319; Member since: Feb 10, 2012

Wtf lol.

34. Farcaster

Posts: 166; Member since: Apr 16, 2018

By your logic, I guess there are too many poor people in the world as Samsung is dominating in each of those markets.

37. Ciro1900

Posts: 591; Member since: Dec 17, 2017

if there are always more poor than rich

40. fyah_king unregistered

Than why is Apple selling more high end phones than anyone else? I guess, Apple buyers are super poor.lol

48. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

& then neither rich nor poor is buying Sony phones.

44. rkoforever90

Posts: 478; Member since: Dec 03, 2011

Actually that's how they started they sold products with same features as sony particularly televisions for a much cheaper rate than sony . During the early days of Lcd tv Sony was the preferred brand but Samsung with a huge marketing and cheaper price rates dethroned sony. Now also they are doing a huge marketing pus for their glorified led to called Qled and I don't remember seeing a sony ad for tv in the past 8 years

28. Humanoid

Posts: 1226; Member since: Dec 11, 2017

Except Samsung and LG the other korean companies are better known outside Korea. Almost all camera brands are Japanese. Toyota, Nissan, Mitsubishi and Honda are 10000 years ahead of Kia and Hyundai.

32. Farcaster

Posts: 166; Member since: Apr 16, 2018

Eh, not many Japanese companies known outside Japan either. Besides car manufacturers, most are on a slow path to extinction with cameras also on decline...

42. Rager722 unregistered

Sony, Toshiba, Siemens, Mitsubishi, Toyota, Nissan, Mazda, Honda, Subaru, Suzuki, Kawasaki, Canon, Nikon, Nintendo, Sharp, Panasonic, Casio, Toshiba, Yamaha, TDK, Sanyo, Sieko, Audio Technica, Olympus, Pioneer, NEC, JVC, Hitachi, Fujifilm, Bridgestone, Bandai/Namco, and Square Enix can think otherwise. All known throughout the U.S and the world... Name some popular Korean companies besides Samsung, LG and Hyundai/Kia?

50. miketer

Posts: 541; Member since: Apr 02, 2015

That surely is a troll comment. Remember, after Pixel, the Xperia line is the one that gets the regular updates....on time. After Pixel, it's the Xperia line which doesn't need to be restarted or the background apps to be cleared. After Pixel, it's the Xperia line that's supported with the latest Android updates for longer periods.

51. miketer

Posts: 541; Member since: Apr 02, 2015

That surely is a troll comment. Remember, after Pixel, the Xperia line is the one that gets the regular updates....on time. After Pixel, it's the Xperia line which doesn't need to be restarted or the background apps to be cleared. After Pixel, it's the Xperia line that's supported with the latest Android updates for longer periods.

3. GreenMan

Posts: 2698; Member since: Nov 09, 2015

Oh yes, kick employees to the curb instead of staying relevant and competitive. I just hate it when people loose their jobs because of so called "downsizing". Capitalism at its finest. 50% of wealth getting dust in vaults while people dying of hunger... P.S I'm no communist or socialist. I'm just not a 'big fan' of capitalism. I personally think we need a new economic system because otherwise... Oh well...

9. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

But by downsizing they are doing exactly what you want from them: to stay competitive and relevant. How can you pour resources into things like R&D, product development, marketing, etc. if you are continually in the red? I know it may seem like a simple easy fix to return to profitability. You’re probably thinking: “That’s easy, just cut the price of the XZ2 Premium to $600 and make a deal with all the major carriers to sell it and have the marketing team pair up with some celebrity to make it popular.” But the reality is those decisions take a whole lot of time. Product development for a phone is still about 2 years (about 1.5 years if you’re a HUGE company like Samsung that has many billions more in cash than Sony). Then you have to remember that making deals with carriers also takes months of time and having a robust marketing department also requires a ton of money and resources. Sony is already spending into the red, they can’t exactly take a huge gamble and spend more or else everyone would lose their job. So, they have to cut back in order to have those resources needed to be competitive again. However, I will say I agree that it should be more than jobs they cut. They need to trim their product line in half. And have partnerships with other struggling companies to perhaps produce a fantastic product together (HTC would be one).

27. Skizzo

Posts: 403; Member since: Jul 14, 2013

They need to focus on their flagship line and not over saturate the market. They should have a "Z" and "Z Compact" line launch in Q1 of every year, and an "X" (currently 'Premium') launch in the fall of every year, and make it count. Streamline your portfolio, focus, and make it consistent with the naming. Listen to the market, follow the paths that work while innovating from within.

4. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

They should focus on just three to four devices: the midrange phablet (a la XA2 Ultra), a normal premium device (like the XZ2 Premium), and an innovative device that would find a niche audience at first but could grow into something unique and popular (return of the Xperia Play or return of the behemoth Xperia Ultra). The possible fourth device would be the Compact depending on if they want to continue with that market.

35. Xtraflossy

Posts: 31; Member since: Mar 13, 2018

I think if they focused on their design language, the rest would take care of itself. Those leaks earlier in the year for the premium.. that was the phone I was holding out for. Didn't happen. Their tech is usually pretty solid. From there they can make phones in different price ranges. Your average consumer doesn't pick one up, and decide they don't want it because they don't know if it's the XZ, XYZ, XTZP, XZc...

36. Xtraflossy

Posts: 31; Member since: Mar 13, 2018

I think if they focused on their design language, the rest would take care of itself. Those leaks earlier in the year for the premium.. that was the phone I was holding out for. Didn't happen. Their tech is usually pretty solid. From there they can make phones in different price ranges. Your average consumer doesn't pick one up, and decide they don't want it because they don't know if it's the XZ, XYZ, XTZP, XZc...

5. torr310

Posts: 1703; Member since: Oct 27, 2011

It's going to be like their notebook department.

6. eghaw

Posts: 17; Member since: May 12, 2015

Forget sony, average performance but premium price; 2018 is different from 1988, nobody will pay a lot more for just sony's name printed on the device. Japanese consumer electronics keeps going down in quality years after years.

11. Humanoid

Posts: 1226; Member since: Dec 11, 2017

Better LCD than iphone and LG devices. Highest bitrate on video recording for 4K@30 Only company to provide 4K HDR recording Only one to provide SDR to HDR video playback Only XZ2 trinity has 10-bit screen, phones with oled have 8-bit Even XA2 has 120Hz screen. And the reviewers talk about size and weight only. Then they give to OnePlus higher score when the device does not bring all this.

7. Nimbus

Posts: 442; Member since: Apr 02, 2018

They need to overcharging prices like samsung,htc,Lg on their midrange phones XA models and offer it at a affordable price in all global market like how Xiaomi,Huawei do it with their midrange product lines and focus on availability in all market.XA 2 models are good but still no availability in my country and focus on 2 Software updates on their midrange phones but they will never do it even after project treble in oreo(let see this time next 2 years after android P and Q annoucement).There Flagship phones are doing good but they need to stop comprising on some stuff like waterproof and Dual sim slot and improve their software a bit to make a new visual appeal look with some new features like double tap to wake and Always on display like on LG V30,V20,G5,G6 and apple iphone 7,8 or Glance screen just like on Nokia Lumia phones and iris scanner or face ID as secondary boimetric security feature and Scrap their L models which offer no good specs but overprice like Samsung J,A series phones.

* Some comments have been hidden, because they don't meet the discussions rules.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.