Sony saw a loss in its Mobile Communications unit for the first quarter of the financial year, with a decrease in smartphone sales in Europe and Japan taking its toll, as it also painted a bleaker picture for the rest of the year.
In a conference call, the company acknowledged that it is “still lagging behind the top-class competitors”. But with a change of management already having taken place, it said it will “not be changing our policy direction in a major way”.
The company reported an operating loss for the business of JPY10.8 billion ($96.5 million), compared with a prior-year profit of JPY3.6 billion, on revenue of JPY132.5 billion, down 27 per cent from JPY181.2 billion. It did note reductions in operating costs as a positive for the unit’s operating income.
Smartphone shipments of 2 million units were down from 3.4 million in the year-ago quarter.
For the full year, it revised its sales forecast down by 5 per cent to JPY610 billion, due to decreasing smartphone sales “mainly in Europe”. The decrease in sales, along with the negative impact of foreign exchange rates, also mean the forecast operating loss has been increased to JPY30 billion from JPY15 billion.
Sony’s smartphone volume forecast has also been cut to 9 million from 10 million, compared with 13.5 million last year.
During a conference call, the company said it is “trying to establish a set up so we can generate stable profit with sales of about 10 million units”. With its current forecasts based on its performance so far, any further deterioration in performance may mean it needs to revise downward further, and “revise our mid-range plan.”
“Since there is a risk that the competitive environment will become even more severe, we have begun to assess the impact on smartphone unit sales in the second half of the fiscal year and the countermeasures we will implement if the risk becomes a reality.”
On a group level, the picture was much more positive, driven by a strong performance in the Game & Network Services unit. In G&NS, sales of JPY472.1 billion were up 36 per cent year-on-year, due to increased PS4 software sales, leading to an increase in operating income to JPY83.5 billion from JPY17.7 billion.
For Q1, Sony reported a profit attributable to shareholders of JPY226.4 billion, compared with JPY80.9 billion in the prior year, on revenue of JPY1.95 billion, up 5 per cent.