Sony to reduce smartphone shipments in profit pursuit - Mobile World Live

Sony to reduce smartphone shipments in profit pursuit

27 APR 2018

Sony Corporation booked a JPY31.3 billion ($288 million) writedown in the value of its mobile division in fiscal Q4 and prepared to reduce unit sales in a bid to turn around operating losses in the division.

The company’s Mobile Communication unit reported falling revenue and earnings in both its fiscal Q4 and financial year to 31 March, as it bemoaned increased component prices and negative foreign exchange movements impacting its mobile business.

Sony said it planned to “significantly downsize” smartphone sales in its current financial year “in an effort to increase profitability”. It also expects to make savings in operating costs.

In recent months Sony continued its bid in the premium segment with the launch of its new flagship at MWC 2018 and the unveiling of higher middle-tier handsets at CES, indicating its reduction in unit shipments will likely be focused on lower-tier models.

Declines
Its operating loss in fiscal Q4 was JPY44.6 billion, on revenue of JPY153 billion. The loss is almost three-times higher than the JPY15.1 billion the unit lost in the three months to end-March 2017.

For the whole financial year, Sony posted mobile division sales of JPY724 billion, down JPY35 million on the previous year, swinging the unit to an operating loss of JPY28 billion from a profit of JPY10 billion in the prior financial year. In the recent period, it was one of only two of the company’s divisions to report an annual loss.

The manufacturer shipped 13.5 million units during its fiscal year 2017, down from 14.6 million in 2016. The company expects this to reduce to 10 million in fiscal year 2018, though Sony added it anticipates the mobile division will cut its losses at the same time.

Despite the negative impact of its mobile division Sony booked group net profit of JPY491 billion for FY2017, up 570 per cent year-on-year. However, in fiscal Q4 the company slipped to a net loss of JPY16.8 billion, down from a profit of JPY28 billion in the comparable fiscal 2016 quarter.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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