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Sony’s smartphone troubles quadruple its expected loss, now at (gasp!) $2.14B

After a revaluation of its mobile division, Sony’s expected losses for the company’s current fiscal year have expanded four times over, from 50 billion yen to 230 billon yen, or $2.41 billion. In a press release on Wednesday, the company explained the situation to its investors:

As a result of revising the Mobile Communications (“MC”) segment’s Mid-Range Plan (“MRP”), as discussed below, Sony Corporation will record an impairment charge of approximately 180 billion yen, the entire amount of goodwill in the MC segment, in the second quarter of the current fiscal year.

Ouch.

The charge partially results from [company]Sony[/company] altering its handset strategy in some regions around the world. Sony will consolidate its line up of phones, with fewer mid-range models, and will concentrate on its premium handsets. The recently announced Sony Xperia Z3 and Z3 Compact then are what you can expect more of from Sony.

Sony Xperia Z3 and Z3 Compact

That may sound good as both handsets appear to be top-notch [company]Google[/company] Android phones but we’ve seen this strategy before. Most notably, [company]HTC[/company] took a similar approach a few years ago — or at least said it would be doing so — yet that company is still struggling as well. Sony hasn’t commented at all on the low-end of the phone market which is where its efforts may be better suited. Yes, the profits on a flagship phone may be higher but most of the expected growth for smartphone sales is at the low end.

 

3 Responses to “Sony’s smartphone troubles quadruple its expected loss, now at (gasp!) $2.14B”

  1. aliothefool

    I said years ago that I thought SONY’s best chance in the smartphone market was to make a PSP with phone capabilities built into it. It still would have been a niche device, but it would have stood out. Instead, they made that abomination phone with some PSP thrown in for Verizon.

    I’ve also said the same thing about Microsoft and an Xbox phone. I’d buy one of those in a heartbeat, but I have no desire to own a Windows phone that I might be able to play some Xbox games on.