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Sony mulls drastic downsizing of smartphone business in China
[September 18, 2014]

Sony mulls drastic downsizing of smartphone business in China


(Japan Economic Newswire Via Acquire Media NewsEdge) Sony Corp. is considering a sharp downsizing of its smartphone operations in China because its business is unlikely to grow in the wake of popular local rivals, company sources said Thursday.



Sony, which on Wednesday warned of a bigger loss than previously projected for fiscal 2014 ending March due to its flagging smartphone business, plans to eventually pull out of the smartphone market in the world's second-largest economy as part of turnaround measures it aims to compile by around November, the sources said.

Sony is putting efforts into introducing advanced audiovisual features in its smartphone models but has been facing tough competition in China due to strong sales of cheaper Xiaomi and Lenovo smartphone models, which are also challenging Samsung Electronics Co. of South Korea.


Given the dominance of local manufacturers in the Chinese market and their moves to strengthen development of high-spec smartphones, the Japanese electronics giant has decided that it would be difficult to expand its smartphone business in China even if it invested aggressively there, the sources said.

Consultancy firm Canalys said the Chinese market accounted for 37 percent of global smartphone shipments, or 108.5 million units, from April to June. Sony was not among the top 10 smartphone providers in the country.

Sony intends to strengthen its smartphone business in Japan and the United States but plans to drastically review its strategy for the European market, where its smartphone sales are poor, according to the sources.

On the Tokyo Stock Exchange on Thursday, the company's bigger loss estimate and plan to skip a dividend for the current business year, announced the previous day, hit Sony shares hard, driving them down 183.50 yen, or 8.6 percent, to 1,940.00 yen.

Sony will skip paying a dividend for the first time since its listing on the Tokyo bourse in 1958.

In July, Sony cut its fiscal 2014 smartphone sales target to 43 million units from 50 million units.

(c) 2014 Kyodo News

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