SONY’s dilemma: smartphone business is up and down

although smartphones is SONY so as to restore one of the important mainstay of electronic business, but the Japanese technology giant has slashed its expected sales of smart phones.

cut smart phones expected sales

on Thursday, SONY announced the first quarter ended June 30, according to the results by video games and film sales force, its net income has reached 26.8 billion yen ($261 million), broke the analysts previously identified the company’s expectations will be a loss. SONY’s sales rose 5.8% year-on-year, rose to 1.8 trillion yen. Its operating profit nearly doubled, to 69.8 billion yen.

in this quarter, SONY’s television business has appeared in trouble; But the company says it is still in the effort to break a year losses in ten years, although it has been downgraded forecasts the television business sales.
Mobile phone sector, however, SONY has suffered losses. A year ago, the mobile phone sector was the company’s most profitable electronics sector. The company has reduced its annual sales target from May 50 million to 43 million. SONY said the phone unit will not be profitable this year, may only be able to break even. In the year to march in the past one year, SONY sold 39 million phones, mobile phone department’s profit of 12.6 billion yen.
“Our projections in May appear overly optimistic.” SONY’s chief financial officer Yoshida health ichiro (Kenichiro Yoshida) said in a news conference.

SONY insists that in the current in a fiscal year, the company’s overall losses will reach 50 billion yen. This will be the sixth loss of the company for seven years.
For has been working to restore the reputation of company innovation CEO Hirai (Kazuo Hirai), SONY smartphone sales target is undoubtedly a major setback.
SONY said senior management, the company needs to expand its smartphone business, because it involved in many areas of competition – – all from the camera to the video games to film to mobile devices.
Ichiro said yoshida, health, mobile unit is to review its medium-term business plan, and may be expected goals down to annual loss status again.

in order to keep the cell phone business profit, SONY plans to simplify its smartphone phalanx, slow down the speed of product promotion. He added that SONY didn’t consider leaving the smartphone industry, but it will be carefully selected mobile phone models and sales.

competition pressure

to some extent, SONY’s problem is very similar to the samsung electronics. The latter, according to results released on Thursday because of smartphone sales slowed, a sharp fall in the number of its operating profit to start. During the period of April – June, although the number of smart phones samsung sales is SONY’s eight times, but the two companies are facing the great pressure from competitors: in the low-end market have under China’s new mobile phone brand, in the high-end market has an apple iPhone siege.

in the list of global mobile phone market share, China’s three smartphone maker huawei, lenovo and millet in third, fourth and fifth position. According to market research firm Counterpoint statistics show that they are profitable in the latest quarter. Huawei’s smartphone sales almost doubled, to 20.6 million units; SONY’s smartphone sales dropped from 9.6 million to 9.4 million units, market share of about 3.1%. In the mainstream mobile phone brand, SONY is the only mobile phone maker, a mobile phone sales slump.

, SONY said its smartphone sales in Latin America is especially weak.

SONY faced a problem is the lack of American mobile operator, which is one of the important channel of mobile phone sales. Among the four mainstream U.S. wireless carriers, only the t-mobile US in distribution of SONY Xperia phones. According to people familiar with the matter, SONY has contacted Verizon wireless operators and other AT& T and Sprint, to discuss cooperation.

the video game business well

in addition, SONY also downgraded forecasts its TV business sales, cut its forecast from May 16 million to 15.5 million. However, by improving the management efficiency, the company said it is still possible to make the business profitable this year. In July this year, SONY has its TV business spin-off set up an independent department. In the first quarter, the previously included TV business that department to achieve the profit of 7.7 billion yen, in contrast, in the same period last year, the department’s profit margin is only 3.4 billion yen.

yoshida health ichiro said, SONY need to restructure, because in the April to June it electronic business is still in the red.
In favor of yoshida, an analyst at the healthy ichiro continue to cut costs.

“according to our point of view, electronic business is SONY’s Achilles’ heel.” Investment bank Jefferies (Jefferies & amp; Artur, an analyst with Co) – high yell (Atul Goyal) wrote in a research note to investors, “we always believe that in the field of the competition is fierce, it needs to compress their goals. We are pleased to see the chief financial officer yoshida health ichiro are doing this.”
In the first quarter, SONY’s video game business doing well. The PlayStation 4 console sales momentum, and users play online games also brought SONY additional revenue. The unit reported profit of 4.3 billion yen, relative to character, the department in the loss of 16.4 billion yen last year.

SONY’s film business has a 7.8 billion yen profit; Last year the figure is only 3.7 billion yen. SONY investment movie “extraordinary spider-man 2” (The backpacks Spider – Man 2) obtained The good box office, though SONY said The film’s real income has yet to reach its expected. (tencent technology academic)