Search results for

All search results
Best daily deals

Affiliate links on Android Authority may earn us a commission. Learn more.

Pressure is on for Sony to drop failing divisions, could include mobile (Update: Mobile performing poorly)

The pressures are coming from both inside and outside the company.

Published onApril 26, 2019

Sony Xperia 10 Plus Review colors

Update, April 26, 2019 (4:11PM EST): It looks like Sony’s mobile division is performing worse than we thought, according to Sony’s financials for Q4 2018.

As a whole, Sony generated 82.7 billion yen (~$741 million) for the quarter and 894.2 billion yen (~$8 billion) in operating income for all of 2018.. That’s a drastic increase from the 22.2 billion yen (~$199 million) that Sony generated in Q4 2017 and 734.9 billion yen (~$6.6 billion) for all of 2017.

Unfortunately for Sony, the outlier continues to be its mobile division. The mobile division lost 97.1 billion yen (~$870) for fiscal year 2018, substantially more than the 27.6 billion yen (~$247 million) that it lost in fiscal year 2017.

Making matters worse, Sony only shipped 6.5 million smartphones in 2018. That’s a little over a 50 percent decrease from the 13.5 million smartphones that it shipped in 2017.

Original article, April 26, 2019 (11:00AM EST): It’s no secret that Sony’s incredibly successful gaming division — fueled mostly by the Sony PlayStation 4 — is helping to keep its other struggling divisions afloat. Those struggling divisions include its mobile arm, which recently saw huge layoff reports and got shuffled into another division to help hide its losses.

However, it appears that even the might of the PlayStation is starting to fade as Sony altered revenue targets to compensate for dwindling sales of the five-year-old console (via Reuters). The alteration has instigated pressure from both inside the company and out to drop the dead weight — including its mobile products.

Third Point, LLC, a hedge fund operated by Daniel Loeb, is building a stake in Sony right now to push the company to shed some businesses. Third Point is primarily interested in offloading the motion picture division at Sony as there are some buyers interested in obtaining the properties under the Sony banner. A sale like that could trim the fat as well as give a good cash boost.

There’s no direct report that Third Point is also planning to push the company to drop its mobile arm, but Jeffries analyst Atul Goyal said in a note last week that “recent reports of activist investors’ interest and stake acquisition is likely to put significant, desirable and sustained pressure on Sony to act.”

Goyal then specifically called out the mobile division as needing to go. However, he disagreed with Third Point and thought the film business should stay as there’s potential for a turnaround. The mobile division, though, is pretty much done in the eyes of investors.

While Sony certainly wouldn’t drop its mobile division overnight, it would make sense for it to start trimming things down this year. We’ll have to wait to see if this pressure from investors and analysts will be enough to sway Sony CEO Kenichiro Yoshida to make some hard decisions.

The latest Sony flagship smartphone, the Sony Xperia 1, was revealed in February but still hasn’t been released.

NEXT: Sony Xperia 10 and Xperia 10 Plus review

You might like