Sony's days in the smartphone industry could be numbered

Sony's days in the smartphone industry could be numbered
Sony has never been able to obtain success in the smartphone industry the way it once controlled the mp3 market, the video game console market, and the television market. Trying to differentiate itself, this year's Xperia 1 flagship, unveiled at MWC in February, features a 6.5-inch 4K AMOLED display with a 21:9 aspect ratio. Despite what would appear to be a great screen for watching streaming video on, the pricing ($999.99 pre-orders for an unlocked model started last month at Amazon) is sure to turn some away.

Meanwhile, Reuters reports (via Android Authority) that for the second time in six years, a particular hedge fund is building up a stake in Sony hoping to influence its business decisions. Those familiar with the plans say that Third Point LLC, run by Daniel Loeb, is looking to implement its own turnaround strategy for Sony. Loeb's fund reportedly has $14.5 billion in assets and is believed to be raising money ($500 million to $1 billion) for a fund dedicated to the purchase of more Sony shares.

The parts of Sony that Third Point wants to take a hard look at include the semiconductor and insurance businesses and the movie studio, which some believe that Amazon and Netflix could be interested in. And while the report from Reuters doesn't mention the mobile phone business, it most likely would be a division that Loeb would prefer to see Sony jettison. Last month, the company folded its mobile unit into the same business segment that includes its TV, camera and audio products. And a report from the Nikkei Asian Review published in March stated that by next year Sony will cut the head count in its smartphone division in half.


Jefferies analyst Atul Goyal told clients in a note sent out last week that Sony needs to exit the mobile phone business. Sony will no doubt want to gauge the reception to the Xperia 1 before it decides whether or not to stop producing smartphones. But if Third Point LLC builds a big enough stake in Sony, the decision whether to cut its losses in the smartphone industry might be taken out of the company's own hands.

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23 Comments

1. AbhiD

Posts: 838; Member since: Apr 06, 2012

So rather than improve the ailing divisions, everyone wants to just throw away everything. That's not the way to bring back a company.

9. Dr.Phil

Posts: 2427; Member since: Feb 14, 2011

Unfortunately, this has been happening a lot. Take a look no further than the once great Sears. After it was taken over by hedge fund manager Eddie Lampert, the guy sold off all of it's worthwhile assets like Craftsman and Land's End and was left with a bankrupt company. They're just now having a turnaround after getting rid of the guy.

2. Feanor

Posts: 1379; Member since: Jun 20, 2012

Sony brought themselves into a very difficult situation. They should have reacted to the market reality 3-4 years ago. Now they have to face either impossible costs to become competitive (if this is even possible) or shut down the smartphone division and with it valuable expertise for their other device divisions, because all our electronics are already more or less smart IoT devices. Very tough decision. I'd be inclined to put the resources and rescue the division instead of making also the gaming and TV divisions uncompetitive, but I guess the markets are always a bit more shortsighted and they see only numbers.

3. josephnero

Posts: 781; Member since: Nov 16, 2011

Less competition is always a bad thing

4. No_Sammy_No_Gimmicks

Posts: 149; Member since: Jun 10, 2015

Should have partnered with Apple to put iOS in Sony when Steve Jobs came begging.

18. Back_from_beyond

Posts: 1433; Member since: Sep 04, 2015

Except that never happened

5. technut

Posts: 205; Member since: Aug 03, 2012

How long ago was the Xperia one announced? It will be overshadowed by the time it's finally released. Too far out launch dates are the problem.

11. User123456789

Posts: 997; Member since: Feb 22, 2019

Companies like Motorola and Samsung start mass production weeks before their events, so they can start selling few hours after the presentations. Sony announces a flagship, keeps working on the prototypes for months, then in may they start production. Very annoying.. I heard they are still finishing cam, just like last year. XZ2 Premium was supposed to be at MWC.

14. Nevita

Posts: 44; Member since: Sep 01, 2018

It was introduced yesterday in Taiwan, with a lot of demos of their Hybrid Image Stabilization, the new HDR algorithm, Low Light performance against competitors, their cinematic recording and the uses of the xperia 1 in profesional workflows. It looks really really good, but i guess their goal market isnt mainstream consumers anymore, i wouldn't expect a price less than $1000

6. groovc

Posts: 1; Member since: Apr 26, 2019

I would just like to see Sony release a product that takes FULL advantage of all of the best of Sony technology. The "phone" part of Sony has always been fine with light skinning, relatively fast updates, and nice build quality. If they could differentiate and add Sony's true imaging expertise to a product then I'd be back on board.

12. User123456789

Posts: 997; Member since: Feb 22, 2019

The devices already use stuff from other divisions. XReality, Triluminos, DSHEE, Hybrid AF etc .....

15. Nevita

Posts: 44; Member since: Sep 01, 2018

Those are I.P. technology, doesn't belong to an specific division

7. shortkey

Posts: 53; Member since: May 19, 2017

Maybe they should make some affordable smartphones. Maybe they should dip their toe in small smartphones - I mean, nobody makes any these days, this could be a gold mine for all we know. If Sony made a tiny 4-inch smartphone, I'd be all over that.

8. KParks23

Posts: 725; Member since: Oct 13, 2010

I've been reading these Sony Mobile is doomed articles for like 8 years now!

10. kiko007

Posts: 7497; Member since: Feb 17, 2016

I like the Xperia 1 as a concept (21:9 OLED) and I hope they actually try marketing their flagship for once.

13. User123456789

Posts: 997; Member since: Feb 22, 2019

They do, but well done just in Japan and Taiwan.

16. Nevita

Posts: 44; Member since: Sep 01, 2018

I don't think this will happen, mainly because picture division is doing well and Sony pictures is working with Netflix providing the profesional solutions and the distribution of tv series like The Crown. And because the mobile division doesn't exist anymore, now is part of the electronic division.

17. Ironmanajm

Posts: 2; Member since: Apr 27, 2019

Bla bla bla........So much talk about Sony's days in the mobile phone industry being numbered over the years and here they still are. And at this very time, Samsung just suffered a huge set back with its Galaxy Fold being a huge failure which is hurting them badly. So for the haters, what comes around, goes around. U can't get the Japanese down, they survived a nuclear holocaust in WWII remember. Go figure????????

19. Ichimoku

Posts: 173; Member since: Nov 18, 2018

First HTC and then SONY (or LG), the old guy android manufacturer will only be Samsung.

20. Plutonium239

Posts: 1230; Member since: Mar 17, 2015

If I could get one subsidized through AT&T, I would get one. But they aren't sold by AT&T. I don't know if it's AT&T or Sony's fault or both.

21. Ironmanajm

Posts: 2; Member since: Apr 27, 2019

The failing Samsung fold caused a huge stain on the Samsung brand. This will be the turning point for them in the wrong way. Everyone who tried to bash Sony has faild over the years. Look at them still going strong for almost 50years.

22. frequency

Posts: 108; Member since: Aug 13, 2013

i recommend XiaoMi or OPPO buys Sony phone manufacture line.

23. michaelny2001

Posts: 334; Member since: Aug 01, 2012

IMHO, Sony is done. TVs ar enot too good, Samsung Amoled killed their LCD, phones are expensive and underpowered, etc. Sonyt was the king in the 2000's with their Bravia models, but competition took over and they didn't keep innovating.

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