Sony throwing in the towel on phones and TVs

Chris Davies - Feb 18, 2015, 8:54am CST
Sony throwing in the towel on phones and TVs

Sony‘s appetite for struggling through the cutthroat smartphone and TV segments may have finally faded, with the company’s chief exec saying he will no longer chase sales growth, and is open to spinning-off each. The admission of near-defeat comes as CEO Kazuo Hirai outlined his new focus for the next three years, concentrating on PlayStation and camera sensor development rather than segments like phones which have been attacked at either end of the market, both by cheap rivals from Asia, and from more high-end competition from Apple and Samsung.

If all goes to plan, Hirai predicted, Sony’s operating profit could increase by a healthy 25-percent over the next three years. However, in the process it could leave Sony’s product range looking very different to how it does today.

Currently profitable sectors for Sony, including camera sensors for standalone cameras as well as mobile devices, would be emphasized. Sony’s heavy footprint in gaming would be another area of strength that Hirai intends to capitalize on.

Sony’s most recent financial results surprised analysts with an unexpected profit. However, at the same time the company warned of shrinking smartphone sales, predicting a 9-percent shrink in sales was ahead.

In fact, Hiari would not “rule out considering an exit strategy,” for both phones and TVs. The company has already sold off its VAIO computing range, which although still launching products – like two new hybrid laptops earlier this week – now has another company at the helm.

The chief exec’s target is at least 500 billion yen ($4.2bn) in operating profit for the 2017/18 financial year.

To achieve that, Sony plans to make better use of partnerships to cut its own costs – such as the recent deal to replace Sony Music Unlimited with a Spotify service – and trim its range more selectively. Earlier this month, it sold off Sony Online Entertainment – behind titles like EverQuest – to an investment fund.

SOURCE Reuters

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