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Sony posts worst quarterly loss in years, blames it on Euro debt crisis

August 2, 2012

A far cry from Samsung’s smashing numbers, Sony is experiencing yet another lackluster financial quarter. During the second quarter of the year, the Japanese giant saw its operating profit slid down 77% to $80 million and suffered a net loss of $310 million. These figures are much worse than what analyst had expected.

In a not so surprising move, Sony has slashed its handheld device sales projection from 16 million to 12 million for the end of the fiscal year.

Not helping Sony’s desire to move out of the red is the rather gloomy economic cloud that’s hanging over many European countries, given that sales from the European market contribute to a fifth of the company’s revenue. Not only is Sony not selling enough products, but the weakening Euro has also dented the company’s profits.

Admittedly, this problem isn’t exclusive to Sony, as other Japanese companies are also paying the price of the weakening Euro. But especially for the Xperia maker, a single Japanese Yen gain over the euro will cut its operating profit by roughly $75 million – more than double that of Sharp’s numbers.

Looking at it from the Android perspective, while the Japanese has seemingly been pumping more handsets, there were several mishaps that have proven to be fatal. The majority of the Xperia series handsets that were released in the last six months came with an outdated operating system, Android 2.3 Gingerbread. In a cutthroat, competitive world where Samsung, and to certain point HTC, are the more preferable Android device makers, it made the the Xperia lines a tough sell for customers.

Back in April, newly appointed Sony CEO Kazuo Hirai said that he wants to see Sony Mobile become a leading player in the smartphone market. It remains to be seen whether his goal of tripling Sony Mobile’s revenue to $22 billion in the next three years will amount to something that’s more than just a pipe dream. It’s going to take a killer product or two that can knock the competition out of the water, which is something we have yet to see from Sony.