Sony announced a loss for its Mobile Communications business, which was attributed in part to increased marketing and R&D expenses in order to expand its sales channels and broaden its portfolio.
In the first quarter of Sony’s fiscal 2014, the company shipped 9.4 million smartphones, down from 9.6 million in the same period last year. It is now forecasting full-year shipments of 43 million, up from 39.1 million in the prior-year, but short of an earlier forecast of 50 million units.
And the company’s revenue outlook was also fairly bleak: sales in the unit are expected to be below Sony’s earlier forecast, due to a decrease in sales of mid-tier devices that had been expected to grow “significantly”, driven by emerging markets.
Sony said that in July it began a review of its ‘Mid-Range Plan’ for the Mobile Communcations unit, which is ongoing. It noted that it is possible that this could lead to impairment charges against various assets, including goodwill.
For the three months to 30 June, it saw an operating loss of JPY2.7 billion ($26.3 million), compared with a prior-year profit of JPY12.6 billion. The company also noted changes in patent royalty payments, which affected its bottom line.
Revenue for the unit increased by 10.1 per cent to JPY314.3 billion. The company said that smartphone sales increased “due to the favourable impact of foreign currency exchange rates, partially offset by a decrease in unit sales”.
On a group level, the company reported a profit of JPY26.8 billion, on revenue of JPY1.81 trillion.
The company noted a “significant increase” in sales for its Game & Network Services group following the launch of PlayStation 4, and in its Pictures division through higher cinema revenue.
It also benefited from “favourable” foreign exchange rate movements.