Sony struggles to reap profits through its smartphones. Despite the release of its highly successful Sony Xperia XZ3 last year, the Japanese firm has not achieved its goal of selling 7 million smartphones during the fiscal year 2018, which ends in March 2019. The turnover the firm dropped 37% in the space of a year. The recent release of the Sony Xperia 1, the new high-end brand, did not save the furniture. In early 2019, Sony has less than 1% share of the smartphone market worldwide, against 4.5% in 2012.
Despite this debacle, the company does not want to abandon the telephony market and does not plan to resell its mobile division. Sony explains the situation by slowing overall sales of smartphones and is just waiting for the market to return to growth. "If we withdraw now from this market, we will not be ready for its next revolution," said Sony CEO in January 2018. Waiting for better days, Sony is forced to act and take drastic measures to keep the head out of the water.
Sony announces the closure of its smartphone factory in China
For starters, Sony has decided to close its smartphone factory located in Beijing, China. The firm will transfer the production of this factory to a Thai factory. This decision should allow the manufacturer to significantly reduce the production costs of its Xperia. According to a Sony spokesman relayed by Reuters, the sale of smartphones should no longer be in deficit from 2020-2021.
That's not all. According to our colleagues Nikkei, a Japanese business daily, Sony will also reduce by 50% the workforce of its smartphone division by 2020. In total, 2000 of the 4000 employees of the firm will be dismissed in the coming months. Some Japanese employees will be transferred to other divisions, the paper says.
In the same vein, Sony Mobile will now focus on the Eastern European and East Asian markets. Southeast Asia, a market where Sony is losing a lot of money, will be phased out. Same story in Australia. "We have reduced our business in Australia as part of our strategy," says Sony LifeHacker. The Xperia 1 will not be released on the Australian market.
Sony merges mobile division with photo and television
Always with the aim of reducing costs, Sony decided to merge Sony Mobile with the section dedicated to televisions and that of cameras. In this way, the financial losses of its smartphones will be offset by the excellent results of TVs and cameras. Indeed, Sony currently holds nearly 10% of the shares of the market of high-end televisions and is placed just behind Samsung and LG.
This new 3-in-1 division will be called Sony EP & S (Electronic Products & Solutions). It will be exclusively managed by the current presidents of the photo section and the TV section. Mitsuya Kishida, the leader of the mobile division, is ousted during the merger.
President Kaz Hirai finally leaves Sony
More than a year after ceding the position of CEO to Kenichiro Yoshida, Kazuo "Kaz" Hirai is abandoning his status as president. After 35 years of service, the man will retire on June 18, 2019. Not surprisingly, he will remain casual consultant for the group. "Since passing the torch to Yoshida-san last April, I have had the opportunity to provide both a smooth transition and provide support to Sony's management," said Kaz Hirai in a statement. communicated.
As a reminder, Kaz Hirai made his entry into Sony in 1984. He was in turn international marketing manager of the Sony Music Entertainment label, leader of the video games section and CEO of Sony. During his career, he was the instigator of one of the greatest successes of Sony: the PS4. A true worldwide success, the console has sold more than 91 million copies.
What do you think of the reorganization of Sony Mobile? Should the Japanese manufacturer abandon the smartphone market to focus on other areas? Will the departure of Kaz Hirai penalize Sony? We are waiting for your opinion in the comments below.
