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Sony closing a major manufacturing plant (Update: Merging mobile division, too)
Update, March 28, 2019 (10:52 AM ET): Although the news below is about a Sony manufacturing plant shutting down, we learned some other, related news regarding the Japanese electronics giant. According to WCCF Tech, Sony is merging its mobile division with Sony TV, audio, and camera product lines. The new division will be known as “Electronics Products and Solutions.”
This is a wholly unexpected move, as we would have more expected Sony to either close or sell off its mobile division, which historically has been its lowest-performing branch. In the last year, Sony has reportedly lost over $1 billion on its smartphones.
However, now Sony can hide the Xperia smartphone line’s poor results within the TV/audio/camera division’s numbers, thus lessening the burden of that division.
One thing is for certain, though: Sony’s smartphone division is not doing well at all, and Sony will need to do more than hide away its failures if it expects it to ever be successful.
Original article, March 28, 2019 (06:06 AM ET): As smartphone shipments in China continue to decline, Sony has announced that it plans to shut down its manufacturing plant in Beijing. Reuters reports that the company plans to shift manufacturing to Thailand in a bid to halve costs.
It is no secret that Sony’s smartphone business is on shaky ground. While there are no definitive numbers for the company’s shipments in China, analysts routinely bundle it in the ‘other brands’ category that accounts for 11 percent of the market. Last December, Samsung too announced the closure of a manufacturing facility in Tianjin amidst tough competition from brands like Huawei, OnePlus and Xiaomi.
Globally, Sony’s mobile division is heading towards losses to the tune of $863 million for 2018, said Reuters. The company’s shipments for the financial year 2018 stood at a woeful 6.5 million.
As the company claws towards a comeback with a renewed design language, focus on updates, it is aiming to turn a profit starting April 2020. Sony has repeatedly confirmed that it has no intention to sell off the smartphone business and expects them to be an integral part of its 5G roadmap.
What do you think? Does Sony continue to stand a chance against high-end competitors? Or should it get into the value flagship segment where they can differentiate themselves through design? Let us know in the comments section.