Sony won't exit smartphone business, to focus more on image sensors

By Souvik Das | Published on 07 Jul 2015
HIGHLIGHTS

Sony Mobile will remain in the smartphone business, says Sony Mobile CEO; to maximise profits with its popular image sensors

Sony won't exit smartphone business, to focus more on image sensors

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Sony Mobile will "never ever" exit or sell out of the smartphone business, was what Sony Mobile's President-CEO Hiroki Totoki had to say, contradicting Sony CEO Kazuo Hirai's speculative remark to Reuters that they would "not rule out considering an exit strategy". Sony Mobile has reported huge losses in its recent past, and faced somewhat of a struggle with its recent products, owing to similar builds and exorbitant pricing.

Quoted in an interview with Arabian Business, Totoki stated that speculations regarding a probable exit for Sony Mobile from the smartphone industry was fueled by the heavy losses it reported in 2014. He stated that the reported loss is a reduction in the estimated valuation of Ericsson's shares that Sony bought back in 2012, and has not affected operational cash flow.

Additionally, Sony has sold its PC-making division, Vaio. However, the smartphone industry appears more integral to its business plans. Hence, instead of bowing out on account of losses, it intends to keep improving in areas of smartphone cameras, screen and audio quality. Sony's image sensors are an integral part of a huge number of smartphones, and it is here that Sony is planning to invest billions as part of restructuring the company and its business model to ensure maximum profitability by 2016.

Sony's image sensors are hugely popular in the smartphone market, and are used by big companies like Apple and Samsung in their flagship devices. However, Sony has stated that its limited production capabilities of image sensors and camera modules has restricted revenue generation. Sony has thus announced issuance of new shares and bonds to raise a target amount of $3.6 billion. This is the first time since 1989 that Sony will be looking to sell new company shares, and the move resulted in an 8.25% drop in its share price. Much of the revenue raised will be invested for production facilities of Sony image sensors.

Sony's recent restructuring expects to see it increasing its profit by four times by F.Y. 2016. With plans to cash in on the profitable sections it has in market - audio, movies, gaming and smartphone components, it will be interesting to see how Sony reestablishes itself in the smartphone market.

Source: Phone Arena

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Souvik Das

The one that switches between BMWs and Harbour Line Second Class.

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