Sony’s Q4 Report & Future Plans
Sony has reported on its financial performance in the last 3 quarters of 2014. According to the report, Sony’s sales in consoles and camera sensors helped in offsetting weak performance areas. Their mobile division is one of the areas that are not as strong. The PlayStation and camera sensors unit provided unexpected buoyancy for Sony – reducing the net loss forecast for 2014. The game console had high demands for holiday periods whilst the camera sensors were in demand due to Apple’s new iPhones.
In the 3rd quarter, Sony sold 11.9 million smartphones that results in operating profit around US$80 million (MYR288 million). For the fourth quarter, the sales volume went up by 27% compared to the same quarter in 2013. The huge impairment charge that Sony have booked in September, however, results in Sony estimating about a total loss of US$1.83 billion (MYR6.6 billion) for mobile division in the fiscal year ending 31st March.
Not only that, Sony has announced more job cuts, this time round with 1,100 workers to be laid off in the coming year. Many suggested the company to restructure the mobile division like how they did it with the laptops and TVs division last year. Although Sony’ Xperia’s lineup has good reviews for several years, it’s not sufficient to get it back on track.
Sony’s 3-year corporate strategy plan is ambitious for its current state; it aims to attain operating profits of at least US$4.2 billion (MYR15.16 billion). They plan to focus on profitable divisions within Sony – image sensors, gaming, and entertainment business. This leaves the mobile division out of their focus. The plan is to revive the tech-giant’s leadership, building profitability based on what they are good at.
The plan will be focusing on profitability and not volume, thus individual divisions will be given more autonomy in decision making. Kazuo Hirai, CEO of Sony, said:
If our initial mid-term corporate strategy was about reforms, the second mid-term strategy starting from the next business year will be about generating profit and investing for growth.
There are possibilities that the Xperia division will be sold, which is not surprising if it is true as they have done so with the VAIO division. However, Hirai did not indicate any intention to sell the division. For now, it is clear that Sony will not focus on Xperia line.