TOKYO: Sony Mobile chief Hiroki Totoki has rubbished speculation his company is set to exit the smartphone business, declaring Sony will “never sell or exit” its mobile division.
Mr Totoki, who serves as the firm’s president, told Arabian Business that even though Sony let go of its Vaio computer business, and split its TV division into a wholly-owned subsidiary, the smartphone market was different.
Sony’s flagship Xperia smartphones are often considered among the best Android handsets on the market but have lagged in sales compared with those from Apple and Samsung.
Sony CEO Kazuo Hirai has also said previously that he would not rule out considering an exit strategy for the smartphone division, telling reporters earlier this year that “[Sony] would no longer pursue sales growth in areas such as smartphones …“
Mr Totoki has somewhat contradicted these messages however, describing rumours the company would no longer make smartphones as mere speculation.
“The speculations arose because in 2014 we made a huge loss as a mobile business,” Mr Totoki told Arabian Business.
“It mainly came from the write-off of the goodwill of our impairment asset. When we bought back Ericsson’s share [in 2012], we bought back 100 per cent of it. And obviously that price was high. We had to write it down and it made a substantial loss for the company.
“But this was an accounting loss and did not impact our cash flow. Our cash flow is very healthy. But the accounting loss was so huge that’s why people have speculated like this.
“Before that rumour, we exited the VAIO business, which was the PC business. That led people to think that Sony would exit the smartphone business, as well. But the smartphone business is very different from PCs.
“Smartphones are completely connected to other devices, also connected to people’s lives deeply. And the opportunity for diversification is huge. We’re heading to the IoT (internet of Things) era and have to produce a number of new categories of products in this world; otherwise we could lose out on a very important business domain.
“In that sense we will never ever sell or exit from the current mobile business.”
Mr Totoki, who took over Sony’s mobility division last year, said he’s working to streamline the division as well as their product portfolio to maximise profitability and improve ROI.
He said he is aiming to decrease costs by 30 per cent and headcount by 20 per cent by the end of 2016.
Sony’s most recent Xperia devices are the M4 Aqua smartphone and Xperia Z4 tablet, which it launched at Mobile World Congress in Barcelona earlier this year.
“The smartphone market is highly cost competitive and we expect the commoditatisation that we’re seeing to continue,” CEO Kazuo Hirai said in Barcelona earlier this year.
“We have to make changes to how we manage our smartphone business. But one thing does not change mobile remains an important part of the Sony group. Smartphones, tablets, smarter are firmly rooted in our daily lives. They’re the last thing we see when we go to bed and the first thing we see when we wake up in the morning.”
His thoughts were echoed by Hiroki Totoki at the event.
“You cannot cost your way to success. Instead our success will come from not just optimising our core smartphone business, but from new ideas, new business opportunities, and even new ways of working. So that whatever changes we encounter, we will develop products that excite and entertain, but do so with profit,” he said.
