Sony Scales Back on Smartphones

Posted on March 30, 2019 by Paul Thurrott in Android, Mobile with 11 Comments

With less than 1 percent of the market, Sony is dramatically scaling back its smartphone ambitions and could exit the business altogether.

News of Sony’s smartphone collapse comes courtesy of a Nikkei report which says that the firm is cutting up to 50 percent of the staff in its smartphone business. That business currently employs about 4,000 workers, so Sony hopes to trim it to 2,000 by March 2020.

As a last-ditch effort, Sony will focus its smartphone efforts on Europe and East Asia (read: China), and it will “limit” its efforts in Southeast Asia. Sony is already essentially absent from the United States.

But it may already be too late to fix this wreck. Sony only expects to sell 6.5 million handsets in its fiscal 2018, half the number it sold a year earlier and just one-sixth the number it sold five years ago. The firm hopes it can turn a profit by fiscal 2020 thanks to reduced expenses. But it’s running the business at a loss for now.

Of course, Sony’s been down this road before, having exited the markets for portable music and PCs in the past. And it’s dramatically cut back its TV efforts, thanks to a tsunami of cheap Chinese competition. That leaves smartphones as Sony’s only money-losing business, Nikkei says.

It’s hard not to wonder whether this fall from grace hold any lessons for current market leaders like Apple and Samsung, which are both starting to struggle. Sony never dominated in smartphones, but it was the worldwide consumer electronics leader at one point, and its designs were once widely respected and imitated. Today, increasingly, it is an also-ran.

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