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Sony Mobile Division Facing Cuts In OZ

Sony Mobile Division Facing Cuts In OZ

Sony said it expected to post a loss of A$2.4 billion almost five times what it forecast four months ago with the Japanese Company slashing the value of its mobile communications unit.

“No subsidary will be excluded from cuts” the executive said. 

Overnight Sony admitted that they had got their smartphone strategy wrong and that they were struggling to compete up against Apple and Samsung along with Chinese brands who offer the same features as Sony but at half the cost. 

This month, the company introduced a new premium model, the Xperia Z3, along with an upgraded smartwatch both are similar to products set to be announced by Lenovo and Huawei.

“Sony won’t compete in price ranges where the customers no longer recognize the Sony brand, and where we can’t charge for a Sony brand premium,” Sony’s mobile devices chief, Kunimasa Suzuki, said.

Chief Executive Kazuo Hirai says he wants to rebuild the electronics arm, but he is running out of options as consumers turn off buying products branded Sony. 

In some cases the only thing Sony about a Sony branded product is the name. 

Earlier this year, the company sold off its unprofitable PC unit and spun out the troubled television business into a separate unit now Sony is looking at new options for this division (see seperate story). 

Executives said Sony was struggling to compete with emerging smartphone brands from Chinese Companies, which offer phones packed with many of the features available in smartphones from Sony at a fraction of the price.

The Wall Street Journal reported that Sony’s chief financial officer Kenichiro Yoshida had hinted at a press conference that the net loss forecast could be widened further when costs related to the job cuts are taken into consideration.

Sony has been struggling in the Smartphone market since it bought out a former joint venture partner, Ericsson of Sweden, in 2012. The same happened to BenQ after they aquired Siemens mobile phone business. 

While several of Sony’s Japanese rivals have exited the mobile-phone business, Mr. Hirai said Sony was still counting on the mobile unit to serve as a pillar of growth in electronics. Instead of trying to compete with low-cost brands, the company will focus on high-end niches in selected countries, he said.

“We believe mobile is still an important business for us, along with gaming and imaging,” Mr. Hirai said. “We still see plenty of room for the industry.to expand rapidly and we would like to build a basis so that we can aggressively jump in” markets beyond smartphones such as wearable devices.