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Sony smartphone sales growing strong, struggling VAIO to be sold off

Sony has just released its figures for Q3 2013 which shows strong growth in its mobile business. But the declining PC market had led the company to sell off its VAIO PC business.
February 6, 2014
SONY Brand Shot logo CES 2014-3

Time to get hyped, it’s financial statement season, and Sony has just released its figures for the third quarter of 2013.

The table below, straight from Sony’s published statement, shows that the company’s mobile products and communications department grown strongly since Q3 2012, with sales revenue leaping by 142.7 billion Yen up to 461.5 billion by the end of Q3 2013, that’s around $4,396 million USD in total. The department is also on a steady path back to profitability, having reduced its yearly operating loss to 12.6 billion Yen, or about $120 million USD.

Sony Mobile 2013

Sony has stated that the biggest driving force behind this leap in revenue is due significant increases in unit sales of smartphones, although Sony hasn’t released the exact figures yet, and some favourable foreign exchange rates. There has also been an increase in the average price of handsets, which would also have helped Sony’s finances along.

Delving into the specifics of these figures, sales revenue increased by a very impressive 44.8 percent compared with Q3 2012. However, excluding fluctuating currency rates shows a smaller, but still healthy, 18 percent increase in mobile sales revenue.

Putting the economics simply, the declining value of the Japanese Yen against most major currencies throughout 2012 and 2013, as seen in the chart of the JPY index below, has improved the global competitiveness of Japanese firms, like Sony, and helped with demand for product exports, as they appear cheaper in other nations.

Japanese Yen Index 2013

Combined with a general increase in the price of handset sales abroad, Sony has benefited from increased global demand and managed to raise its prices at the same time, resulting in a very healthy boost to revenue.

Sony to sell off VAIO

However, it’s not all been good news for Sony’s mobile business. The company’s personal computer sector is still struggling due to the declining PC market, which has led Sony to sell its VAIO PC business to Japan Industrial Partners Inc. The TV part of the company will be retained, but spun off into a separate unit.

VAIO Duo 11

As a part of the business transfer to JIP, Sony will cease development of PC products, with manufacturing and sales to be discontinued after the spring 2014 line-up has finished its global launch. As a result of the sale, Sony is anticipating that it will lose around 5,000 (1,500 in Japan, 3,500 overseas) by the end of financial year 2014. The acquisition is expect to cost around $988 million and will be completed sometime in early 2015.

On the plus side, this means that Sony will be able to refocus its resources on the more profitable aspects of its business. Sony has said that it will be “concentrating its mobile product line-up on smartphones and tablets” in the future.

Overall, it seems like a very sensible business decision. If Sony’s recent smartphones and tablets are anything to go by, the company is setting itself up for a strong future.