Just when things were starting to look up for Sony chief Kaz Hirai, the sky has come crashing down again. The company has quadrupled the amount of cash that it expects to lose for the current financial year, this time blaming its smartphone business on the issue. It described the problem as “the impairment of goodwill in the mobile communications segment”.
This amounts to a whopping ¥180 billion ($1.6 billion), and will bring the firm’s expected loss up from ¥50 billion ($466 million) to ¥230 billion ($2.1 billion). That’s a staggering sum, considering that things were looking rosy not too many weeks ago. Of course, it now means that it will probably post an operating loss for the year, rather than the small profit that it had previously forecast.
The good news is that the PlayStation business is faring fine, but between poor selling televisions and now mobile phones, there’s always something else to drag its performance down. Analysts reckon that the fact that the Xperia line can only be purchased from T-Mobile in the United States is the part of the problem, as it’s the fourth largest carrier in the country.
To be honest, smartphones aren’t our strongest subject, but we were under the impression that the latest line of Sony cells are actually rather good. Of course, having followed this company closely for the past five or so years, we’ve come to realise that no matter how quality its products are, it’ll always find a way to mismanage them and lose money. In that sense, the PS4 is bucking the trend.
[source eurogamer.net]
Comments 33
Guess I better grab an Xperia Z3 this Christmas
Sony loses $2B, MS spends $2B on Minecraft, coincidence?
@WickedKnightAl Every little helps - Sony needs the money.
Sony are kinda free falling at the moment.
in terms of income, Playstation its pretty much at the bottom of the list for Sony, Audio, Blu Ray and camerass are the biggest (much, MUCH bigger), so even if the PS brand is doing good now, its not really a turning point for Sony. does it helps ? of courseit does !, but i dont know how much when you look at the bigger picture
Back on the smartphone thing, besides Motorola (cant wait for the Moto X 2014 !!!), Sony is my second favorite company, they made some great phones (loved my Xperia S back in the day), but yes... releasing a big phone every 5 months or so, just adds to an already HORRIBLE marketing move when it comes to names, i mean, IF you dont know NOTHING about smartphones what the hell is better ? a T2 Ultra, Z2 Compact, E1 Dual, etc... ?
@Faruko I believe Sony makes the most money on insurance, which is bonkers for a firm famed for its electronics.
Agree with you, though. Sony simply has too many products across all categories. They only need to release three phones at most each year. Market them well, give them good names, etc. Again, though, this isn't really my strongest subject.
@get2sammyb wow yes ! i forgot that, but i get you see the point, Sony has been bleeding money for quite some time, PCs, TVs and Mobiles are to be blame
I guess years of overpricing your products just because it says "Sony" doesnt help either (wonder if it will ever happen to Apple lol), the PS4 its pricing accordingly and its doing amazing
At this point i think Sony just need to get rid of TVs and Mobiles too.. they did with Vaio already, well Mobiles "can" be saved, Motorola made such a 180 turn (they were pretty much dead at some point) by just focusing on releasing 2-3 phones with a clear distinction (i actually sold my Xperia S for 300 dollars and bought a Moto G for 200, which left me 100 bucks on my wallet)
I love my sony tv, its great for gaming. So good I bought the smaller version for my bedroom as well.
Finally breaking free from Apple and getting a Z3 in November when my contract runs out, and can't wait. Looking forward to the PS4 remote play with it.
I still love my Xperia C
But i understand its hard to compare T2, C, and even M2
Sony has been this way for years but the next time Microsoft buys out a franchise like they did with Tombraider people will still shout about Sony needing to do the same back to Microsoft and play them at their own game. Microsoft is a financial powerhouse with money to burn, Sony are always running at a loss...I've been playstation since 1997 but I can't think of many other products of theirs I've owned, I think I had a cassette Walkman made by them once and I have a DVD player of theirs but that's about it.
Another loss... Kaz Hirai is doing a fine job.
@Faruko I am going to trust every comment you say from now on simply for mentioning Moto X.
I said a few months (a year??) ago that sonys issues were simply because they make inferior products right across the board. Including their smartphones. Well as someone who follows the mobile tech industry fairly closely I can confidently say my old comment simply doesn't apply anymore. Their new line of tablets and smartphones are right up their with the best of them - if not the best! (Besides Motorolas products) So it really does now seem like a marketing/distribution problem. I have many US friends who simply cant get their hands on the latest xperia phones.
@eLarkos I got the Moto G as i was still studying so i could not get the Moto X but my brother did i fell in love with it (just like i did with my Moto G, pure android > everything, it actually shows you how much those custom ROMs created by Samsung, LG, etc... can affect your phone, the Moto X is much more smoother than the S4 for example) and i sworn myself i would get the next Moto X, and now that im working i can (and a PS4 too hahaha)
To be fair to Kaz, he inherited a partly sinking ship and has had a very tough job trying to repair the leaks. These things take time and personally I think Sony need to streamline their business further by concentrating on fewer devices/categories but making those devices/services better.
At the moment they seem to be jack of all trades and masters of none (except PS4)
Dang, will it ever stop? How much money do they have anyway? They have to have one huge bank account to keep sustaining these losses.
@get2sammyb Yeah, that's what Apple did with its products, as it worked pretty well. Don't really keep up that much on Sony phones and whatnot, but the problem sounds about right. Insurance part still makes my jaw drop too.
Kaz isn't the one losing money on this. You can thank your good friend Howard Stringer for creating so many damn branches for Sony, I mean it was only a matter of time before losses were going to hit. I personally think Kaz should break off of the Mobile market or cater the mobile phones to more lower income. again, it's sony being expensive again and you can't do that when everyone and their mothers are paying monthly on like five or more products. If your not going to make cheaper phones and less of them, break away from it.
Their high-end smartphones are pretty good (albeit slitghly overpriced), they did played quite a big catch up at some point (after the fiasco that were the SE Xperia line up, the old one, not the new), in fact, the Xperia S was the "high-end" (With the amazing Xperia U being the low end) smartphone that wasnt up to date when it came to specs at the time (Dual-Core vs Quad-Core).
Nowdays they have the big guns, but a bazillion of terrible phones with almost 0 chance of getting an update, no wonder they end up not selling... Samsung gets away with it (and i bet the Moto G/E hit them hard anyway)
Personally, i think sony needs to sell off their smartphone division as well as do a major restructuring with their tv's. Are their smartphones outstanding? Recently yes they are, but a lack of availability on certain carriers and weird marketing kills them. Their tvs are among the best in the business, but your average joe looks at a 1300$ 42" sony, and a 500$ 47" vizio, both 1080p, and will most likely choose the cheaper option regardless of picture quality or durability (prices based off the last time i looked around and its been a while). Other than that, they spend a ton of money on r&d on niche products (the sony smartband comes to mind), and continue to fight a losing battle in the mp3 player business. Even ms with the (in my opinion) very well done zune had the smarts to cut their losses, and they have money to burn. The overpriced factor of sonys pcs killed them, even though they were really, really well designed. Im sure the ship will be righted, its just a matter of trimming more fat.
@BigDaddyT0101 The problem is not only that, but i REALLY doubt the difference is worth $800 dollars
i know about a thing or 2 about technology, and i would not pay it, i rather save those $800 dollars and get a (not-so) worse TV, than going big for it, especially when we are in such a big recession.
I'm actually thinking about buying the new Xperia Z3 Compact this Christmas. Seems like the perfect phone to me. I don't really like that almost every other smartphone with high-end specs has a >5" screen imo, so the Z3 appeals to me.
Anyway, I'm not too knowledgeable on the subject but from the tech site I regularly visit, the Xperia smartphones and the Z1 and Z2 Xperia tablets are always very well received in terms of hardware and features. Too bad they don't seem to be get much marketshare.
Anyway, I hope they'll find a good strategy and I hope Kaz has a good strategy.
I think streamlining the Xperia brand and the amount of models in mid-range is a good start.
Sony has to get rid of all divisions except Playstation, SCO, Movies, Music and Financial Services
@Demi_God It's actually the cheaper, mid-range Xperias that aren't selling well.
@DualWielding Keep everything imo, as long as the quality is there.
Sony need a shakeup. Get rid of the dead weight bogging down the company, focus on the good divisions. Too much sectors, not enough focus,
@Punished_Boss Playstation Insurance sound fun! XD
Seriously though, what else would they cut besides TV and Smartphones? I was thinking that they should spin-off Playstation and their other profitable divisions into seperate entities (so they won't be held back by Sony's dead limbs) and do a sink or swim aprroach on the rest of their divisions.
They need to sell off the branches not making a profit and once they start making profit, then they can slowly incorporate those decisions back into the company, but with different means. This means, scrap the phone market, but keep the tablets, then when things go really good, they can recreate their phones again and do it smarter.
I have never owned a sony phone, oddly enough, as i had sony tvs and dvd players and walkmans and cd players in the 90's too.
I dont really by sony products other than their consoles. I have bought a dvd player from them and some headphones in the past but thats it. Their other products dont interest me much
This is sad News + I got a Z1 and it's LOVELY
The reason Sony is expecting to lose money despite the PS4 success is Smartphone, TV and Movie division of Sony.
I never heard of Sony Pictures losing money. It was the TV and phones, along with the computer line and those odd techs they were funding but never selling as they were too expensive.
The Sony and Nintendo partnership needs to be revisited, methinks.
The smartphone market belongs to apple and samsung, no surprises there really. I don't get the thing about their TVs, as they are usually superior to Samsung (maybe not LG) and far better priced. I love mine!
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