Sony Mobile Communications

History

2019

Liquidation of division of Mobile Communications and transfer of mobile business to Electronics Products & Solutions

The Japanese company Sony announced in March, 2019 large-scale reorganization during which it will close the mobile division Mobile Communications (MC) which is engaged in production of smartphones. In recent years it yielded to the company some losses what its abolition^[1] is connected^[2].

However does not leave the market of the Sony smartphones – it will continue to release portable gadgets, and this duty will be assigned to new division of Electronics Products & Solutions (EP&S). Changes will become effective on April 1, 2019. In total Sony will close three divisions – from structure of the company on the next Monday departments of Imaging Products & Solutions (IP&S), Home Entertainment & Sound will disappear (HE&S). According to official figures, they, as well as MC, will be a part EP&S too.

Mobile business of Sony cannot come to profit from year to year – according to Counterpoint, it does not enter even the first five of producers, conceding not only to Apple and Samsung, but also Huawei, Xiaomi, Oppo and Vivo. One of probable causes – the overstated cost of models in comparison with analogs of other brands. For an example, the leader of 2018 of Xperia XZ2 Premium went on sale in Russia in July, 2018 at the price of 80 thousand rubles, having non-standard design, with a considerable thickness of 12 mm and weighing 236 grams. In foreign countries for it asked $1000 (64.8 thousand rubles at the rate of the Central Bank for March 29, 2019). At the time of release it was more expensive, than Apple iPhone X.

Reduction of 50% of the state in mobile business

At the end of March, 2019 it became known of mass layoffs of the staff of Sony involved in development, sales and production of smartphones. The company will reduce a half of the corresponding jobs — 2000  of  4000.

According to the Nikkei edition, liquidation of working positions it will be complete by March, 2020. Personnel cleaning is performed within the expense reduction program in telephone business and changes of a purchasing system.

The Sony smartphones are on sale worse and worse, forcing the company to reduce personnel

Some Japanese staff of Sony who got under reductions will pass to work into other divisions of the company, and in Europe and China will offer workers voluntary resignation with receiving compensation.

The 50 percent staff decrease in mobile business became known in several days after the relevant division was merged into the structures specializing in release of digital cameras, TVs  and other consumer electronics.

Dismissals became a compulsory measure, considering falling of both all market of smartphones, and Sony on it. According to the Statistica portal, in 2019 the share of the Japanese corporation in global sales of smartphones fell lower than 1%, and in the 2010th it exceeded 3%. Sony is heavier and heavier to compete with the leading Apple,  Samsung Electronics  and Huawei which organized a race in development of a 5G devices, Nikkei notes.

The edition reminds that earlier in mobile division of Sony there were already reductions. So, in 2014 financial year of work lost about 1000 employees. But sales at the company decrease quicker, than it was expected, pushing it to new dismissals.

Sony is forced to reduce telephone business in some regions, including Southeast Asia. The company placed the main focus in 2019 on the European market and the countries of East Asia.^[3]

Closing of the main plant for disposal of telephone business of losses

On March 28, 2019 Sony announced closing of the main plant on release of smartphones. The Japanese corporation cuts down expenses in hope to return telephone business to profit.

As the representative of Sony reported Reuters news agency, the company will stop work of the enterprise in Beijing until the end of March, 2019, and production of devices on this object will be thrown on factory in Thailand. How many jobs at the same time will be reduced, are not specified.

Sony closed the main plant on production of smartphones in hope to save telephone business from losses

After a stop of the Chinese factory Sony will have only one own plant where smartphones are manufactured (in Thailand). The company also cooperates with third-party contract producers which assemble electronics by orders.

Sony emphasized that the decision on closing of the plant is not connected with deterioration in trade relations between the USA and China. This step is caused by desire of the company to reduce operating expenses to make mobile division profitable according to the results of financial year which will begin in April of the 2020th.

According to the results of the reporting 12-month period which will come to the end on March 31, 2019 the company expects operating losses in telephone division at the level of 95 billion yens ($853 million) at revenue in 490 billion yens (about $4.4 billion).

Closing of the enterprise for production of smartphones looks a logical step, considering the falling sales of these devices. According to the results of 2018 financial year of Sony predicts sales of 6.5 million tubes that it is twice less, than the previous year. The company several times worsened the forecast for sale of smartphones within a year. The share of Sony in the market fell lower than 1%.

Despite all problems of Sony is not going to sell or close division on release of smartphones. Instead the company is going to carry out reorganization and to change the strategy of work.^[4]

2014: Sony lost billions of dollars on smartphones and dismissed the head of Sony Mobile

Sony recorded in October, 2014 in the mobile division according to the results of the II quarter 2014-2015 financial years which ended on September 30, an operating loss in the amount of 172 billion yens ($1.6 billion). The previous year the company got profit in the amount of 8.8 billion yens, reported in the published report of the company.

Revenue of Sony Mobile made 308.4 billion yens ($2.8 billion) that above in comparison with the same period of last year (304.6 billion yens) is insignificant.

Commenting on a situation with business of the company, last month the CEO of Sony Kazuo Hirai said that Sony is under serious competitive pressure from the Chinese smartphone manufacturers. Once entering the first five, Sony yielded a market position to such companies as Huawei, Xiaomi and Lenovo.

Xiaomi according to the results of the III quarter 2014, according to IDC, for the first time entered in Top-5 of producers, and took at once the third place. Lenovo took the fourth place.

Owing to the strengthened competition Sony lowered the predicted sales volume of smartphones for all current financial year. The corporation expects to supply 41 million devices to the world market. In July, 2014 the company predicted supply rate at the level of 43 million devices, and in April — 50 million^[5].

2011

Redemption of a share of Ericsson in JV Sony Ericsson

On October 27, 2011 it became known that the Japanese corporation Sony and the Swedish equipment manufacturer of communication of Ericsson announced the consent of Ericsson to sell a 50 percent share in Sony Ericsson Mobile Communications joint venture belonging to it.

Let's remind that rumors about possible acquisition of a share of Ericsson by Sony corporation went for a long time. As a result of Sony became the owner of a 100 percent share of joint venture for release of mobile phones. Transaction amount was 1.05 billion euros. It is going to close it in January, 2012.

As stated in the official statement, the transaction will allow Sony "add the growth portfolio of consumer Internet devices including tablets, TVs and personal computers". Besides, it will allow the Japanese corporation to expand a portfolio of the patents concerning technologies of communication.

Integrating assets of Sony Ericsson and own assets under a uniform roof, Sony expects to create a better ecosystem of products of Sony which will include smartphones, tablets, personal computers and TVs and also Sony PlayStation Network and Qriocity services which the company actively advances on mobile devices, the president and the CEO of Sony Howard Stringer reported.

In turn the head of Ericsson Hans Vestberg added that after sale of the share in the joint venture the Swedish company is going to be focused on technologies of communication - i.e. on core business.

The Sony Ericsson trademark, most likely, will stop the existence.

The loudspeaker of a share Sony Ericsson in the market of cell phones and smartphones

Leaders in sales of mobile phones and smartphones from 1992 to 2018 in animation are lower.

Development centers in Beijing, Silicon Valley, Lund and Tokyo

Beijing, Lund, Silicon Valley, Tokyo (data for October, 2011)

2010: Transition from Microsoft OS to Android and exit to profit

In 2010 Sony Ericsson supplied to the market 43.1 million mobile devices against 57.1 million the previous year. Revenue of the company was reduced from 6.79 billion euros to 6.294 billion euros. In 2010 the company got a profit, having recorded it on a mark of 90 million euros, the previous year the loss made 836 million euros.

In 2010 the vendor refused from operating system Microsoft and passed on Android, having released Xperia X8.

According to Gartner, in the II quarter 2011 of Sony Ericsson was the tenth in sales volumes producer of mobile phones, conceding to Motorola, Huawei, HTC, RIM and other companies.

• Market share of 11% in the sector of smartphones based on Android (as of the 3rd quarter 2011).
• 80% of sales of the company made smartphones (based on Android OS).

2008: The announcement of a line of Xperia on the Windows platform of Phone

In 2008 the vendor announced a new line of devices - Xperia, - which had to include hi-tech models. Xperia X1 communicator on the Windows platform of Phone became the first device of family.

2007: Release of hit Sonyericsson P1 on Symbian OS

In 2007 there was a Sonyericsson P1 smartphone which became one of the most popular devices of the company. The device was based on Symbian with the touch UIQ graphical interface, had the physical keyboard of the reduced format and the stylus for work with the touch screen.

2005: Release of the first mobile phones

The company gained the greatest fame after 2005 when the first mobile phones under the brands borrowed Sony - CyberShot K750i and Walkman W800 were presented. The first were positioned as cameraphones, the second - as devices from the selected musical component.

2001: Start of Sonyericsson joint venture

The Sonyericsson company began to work on October 1, 2001. The agreement on joint work was signed for 10 years, and in 2011 the parties refused its prolongation^[6].

Notes