There’s been a lot of talk about Sony and the seemingly dire situation that is their mobile business. Really, their story isn’t too unlike HTC’s. Both companies make fantastic Android software/hardware, but despite all this have failed to make headway in a smartphone market dominated by Samsung and Apple.
It’s because of this — like HTC — we’ve been hearing talk that Sony could soon sell off their mobile unit entirely to focus on the PlayStation brand. If this perhaps has influenced your decision to buy a Sony handset or tablet (like the recently launched Sony Xperia Z3+ or Sony Xperia Z4 Tablet) you may want to reconsider.
Speaking to Arabian Business, Sony Mobile CEO and President Hiroki Totoki gives us some insight on his plans for the company, calling 2015 their “year of big transformation.” Despite what Sony calls “severe” competition in the mobile space, he believes Sony can turn things around next year by continuing to focus on the user experience and new technologies.
“Yes, the competition has become severe. The smartphone device consists of a battery and a screen and chips. These are the main parts of a smartphone, and people can easily make them now. But it is the user experience that is not the same. Even if the device is the same, the user experience is different. And this is a very important point. People are not buying a smartphone because of the device and the way it looks — they are buying it because of the experience.”
So, what about those huge losses from last year? He goes onto say explain that, contrary to reports, their mobile cash flow has been quite healthy:
“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.”
Addressing concerns that Sony could be looking to sell off their mobile business, Totoki puts it bluntly, saying that Sony will never sell or exit from their mobile business. As for what comes next after the smartphone, Totoki says IoT (Internet of Things) is Sony Mobile’s next big bet.
“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.”
There you have it. Keep in mind we are dealing with corporate speak and while we don’t expect the CEO of a major company to admit his company is failing, his wording was pretty strong. Still, if Totoki can’t bring their mobile division out of the red, ultimately it’s not he who has the final say on what Sony will do with their mobile unit. That will be up to Kaz Hirai to decide.