In an interview with Arabian Business, Sony Mobile CEO Hiroki Totoki stated that the manufacturer is not exiting the smartphone business, reiterating that Sony is committed to making mobile devices:
Smartphones are completely connected to other devices, also connected to people's lives — deeply. And the opportunity for diversification is huge. We're heading to the IoT (Internet of Things) era and have to produce a number of new categories of products in this world, otherwise we could lose out on a very important business domain. In that sense we will never ever sell or exit from the current mobile business.
Totoki commented on the speculation from earlier this year suggesting that Sony would sell its smartphone division on account of flagging profits:
The speculations arose because in 2014 we made a huge loss as a mobile business. It mainly came from the write-off of the goodwill of our impairment asset. When we bought back Ericsson's share [in 2012], we bought back 100 percent of it. And obviously that price was high. We had to write it down and it made a substantial loss for the company.
But this was an accounting loss and did not impact our cash flow. Our cash flow is very healthy. But the accounting loss was so huge — that's why people have speculated like this. Before that rumour, we exited the VAIO business, which was the PC business. That led people to think that Sony would exit the smartphone business, as well. But the smartphone business is very different from PCs.
The head of Sony's mobile division shared details on how he intends to turn things around, focusing on cutting down operating expenses:
We are trying to decrease our costs by 30 percent to the end of 2016, and reduce our headcount by 20 percent. We are trying to streamline the organisation as well as our product portfolio to maximise our profitability and improve our ROI.
We have set out our plan already and are just starting to execute it. This year, 2015, is a year of big transformation, and we will try to complete this transformation by the end of the year, and hopefully see an improvement in financial performance in 2016.
Another crucial aspect that Sony will be targeting with its upcoming devices is the user experience:
People are not buying a smartphone because of the device and the way it looks — they are buying it because of the experience.
Totoki also shed light on Sony's ambitions in the wearable segment, stating that it is an area of focus for the manufacturer:
We've got a good feel for the technology and we're not limited to the smartwatch. We include smart wear, smart products, and smart devices, and there are many more things now being made for the IoT (Internet of Things) era.
Those types of devices, and that side of the industry have become huge, and not limited to a smartphone device. Now we try to develop smart devices that are connected to the smartphone. In the future there will be categories of products that will connect to the network, connect machine to machine, connect machine to human, and connect human to human. That sort of connectivity will expand and we will try to develop even more categories in the future. That's one major focus for this company. It's a big future strategy.
The executive also talked about the competition — especially Chinese manufacturers — as well as upcoming technologies such as 5G. Head to the source link below to read the interview in its entirety.
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