[PConline News] Foreign media reported that Sony said on Wednesday that it expects its net loss for the 2014 fiscal year ending March 31 next year to exceed the previous forecast of 50 billion yen (about 465 million U.S. dollars), which will increase to 230 billion yen. (About $2.14 billion), and this expectation also shows that Sony's mobile communications business unit faces serious difficulties.
Sony said that the loss of US$2.14 billion greatly exceeded its previous expectations, and this loss was mainly due to its once brilliant mobile sector. Sony also said that it will stop paying dividends in the 2014 fiscal year, which is the first time Sony has stopped paying dividends since it was listed in 1958.
Sony said in a statement that the company will pay more attention to the high-end mobile phone business and reduce the production volume of mid-range mobile phones. The company will adjust the business strategy in some areas but did not specify which areas to adjust.
Last year, the Sony mobile phone business unit was the most profitable, but due to the increasing pressure from Asian competitors on the mid-range smart phones, Sony also had to face the difficult situation of mobile phone sales decline. For example, in China, the world's largest smartphone market, Sony is facing strong competition from companies such as Huawei and Xiaomi. In the Chinese market, mobile phone manufacturers such as Huawei and Xiaomi increasingly dominate.
At the same time, in the higher-end smart phone market, Sony is also facing strong competition from rivals such as Apple and Samsung.
In addition, some analysts who had previously been optimistic about the Sony mobile phone business also pointed out that the establishment of more appropriate plans to force the company's own strong market (such as Japan) may be successful. Pelham Smithers, executive director of market analysis firm Pelham Smithers Associates, said: “The current situation seems to indicate that Sony’s role as an important player in consumer electronics has ended.†Smiters also said: "He believes that the depreciation of the mobile communications business may lead to the dismantling of Sony's cell phone business, and this may also be the last step in Sony's expulsion from the consumer electronics industry."
Earlier this year, Sony had already sold its computer division and separated the TV group into an independent department. Schmiters said: "Looking forward to the future, Sony may focus exclusively on cameras, video games, software, Sony Pictures and Sony Music."
In July of this year, Sony said that sales of mid-range smartphones in emerging markets failed to meet expectations, and as a result, sales volume is expected to decline from the previous 50 million to 43 million.
Cuts mobile employees
At the same time, Sony CEO Hirai Hirai said on Wednesday that the company will also lay off 15% of its employees in the mobile division in fiscal 2014. Sony had previously planned to further expand its mobile business unit, but it has now changed its previous strategy.
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