Sony Mobile’s troubles have been well flagged in recent years. Sony’s latest results highlight that its mobile business saw revenues decline by 31% in the year to 31 March 2019 to 226 billion yen. The reduction was mainly due to the number of Xperia units sold halving, from 13.5 million units in the previous year, to just 6.5 million over the last 12 months.
This means that Sony shipped only 1.1 million Xperia units in the last quarter – the lowest ever, and by quite a margin. This resulted in much higher losses for the division, with operating losses increasing by 70 billion yen to 97 billion yen overall. Sony reiterated that it plans to reduce operating expenses within its mobile division by 50%, with a plan to turn Sony Mobile profitable in the 12 months to March 2021. Halving the smartphone workforce will help Sony to achieve this.
In addition, Sony said that that it had accelerated plans to cease production at its Beijing factory, as reported previously, as well as confirming that it had already left a number of markets including the Middle East, as well as Central and South America.
It is pegging on its ability to turn a profit through new products like the Xperia 1, while it focuses on its “important regions” of East Asia, Japan and Europe.
Sony is planning to consolidate a number of its electronic businesses into one division called “Electronics Products & Solutions (EP&S)” going forward, but it confirmed that it will continue to disclose the performance of its mobile business “for the time being”.
The only estimates we know for next year on mobile is that Sony plans to ship 5 million Xperia units – even less than this year. So, it’s clear that Sony does not expect any quick turnaround in smartphones.
We don’t know how Sony plans to stem the decline in its ever-shrinking mobile business, but it will be holding a strategy day on 21 May 2019, where we hope to get further details. If you were Sony’s management team, what would you do to turn around the mobile business? We’d love to hear your thoughts in the comments below.
- Sony Mobile financials for FY18
Sales: 498 billion Yen
Operating Loss: 97 billion Yen
Xperia units sold: 6.5 million
- Sony Mobile forecasts for FY19
Sales: 410 billion Yen
Operating Loss: 47 billion Yen
Xperia units target: 5.0 million