Bloomberg News

Sony Aims to Make Mobile-Device Unit Profitable Next Year

March 04, 2013

Sony Corp. (6758) plans to make its mobile- device business profitable next fiscal year as it boosts shipments of smartphones, the head of the unit said.

The maker of Xperia handsets and tablets plans to sell more than 34 million smartphones in the year beginning April 1, Kunimasa Suzuki, chief executive officer of the unit, told reporters in Tokyo today, without giving a more specific figure. The company said last month it’s targeting 34 million shipments this fiscal year.

President Kazuo Hirai is focusing on mobile devices as a key to reviving Sony, which is reeling from four straight annual losses amid slumping demand for TVs and competition from Samsung Electronics Co. and Apple Inc., the two largest smartphone makers. Sony bought out its mobile-phone venture with Ericsson AB last year for 1.05 billion euros ($1.4 billion) and is eliminating about 15 percent of the unit’s workforce.

“Sony needs to sell about 50 million smartphones to rank third, behind Apple and Samsung,” said Hideki Yasuda, an analyst at Ace Securities Co. “I think Sony has the ability to achieve it, but if it can’t reach 50 million, it will fade and become irrelevant.”

The company is rolling out a global marketing campaign for its Xperia Z smartphone in more than 20 countries, it said Feb. 26. The water-resistant handset was among new products released at the Consumer Electronics Show in Las Vegas in January.

Xperia Z

Sales of the model topped 160,000 units in Japan in the two weeks after it was introduced Feb. 9, Sony said in a presentation today, citing a survey by NTT DoCoMo Inc. (9437), the nation’s largest wireless carrier. It was Japan’s top-selling smartphone in the three weeks started Feb. 4, Sony said, citing researcher Keitai Watch.

The company is also introducing a new water-resistant tablet, the Xperia Tablet Z. Sony began selling its first tablet in 2011.

The Walkman inventor has gained 50 percent in Tokyo trading this year as a weaker yen buoys Japanese exporters’ earnings from overseas. The stock rose 3.5 percent to 1,438 yen at the close of trade in Tokyo today.

Sony can turn its handset business into a profit driver by focusing more on high-end devices, Hirai said in January.

The electronics maker aims to generate 1.8 trillion yen in annual sales of mobile devices such as smartphones, tablets and laptop computers by March 2015, Hirai said in April. The section making those devices had revenue of 904.8 billion yen during the nine months ended Dec. 31, while posting an operating loss of 72.6 billion, Sony said Feb. 7.

Sales Targets

Sony last month cut sales targets for TVs, compact digital cameras, personal computers, camcorders and portable game players for the year ending March 31, while maintaining its goal of boosting smartphone shipments 51 percent.

Worldwide smartphone sales jumped 36 percent to 219.4 million units in the fourth quarter, according to research firm IDC. Sony’s market share rose to 4.5 percent from 3.9 percent a year earlier, making it the fourth biggest manufacturer, the researcher said. Samsung was No. 1 with 29 percent of the market, followed by Apple with about 22 percent.

Sony sold 8.7 million smartphones in the quarter ended Dec. 31, it said in a Feb. 7 statement. That compares with 27.4 million units for Apple’s iPhone 5 and 15.4 million units for Samsung’s Galaxy S3 sold during the period, according to estimates made by Boston-based Strategy Analytics last month.

To contact the reporters on this story: Ma Jie in Tokyo at jma124@bloomberg.net; Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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