Sony-AH-55

It Seems Like Sony Might Withdraw From The Chinese Market

October 15, 2014 - Written By Kristijan Lucic

Sony, much like HTC, is having problems turning profit as far as their mobile business goes. Sony’s Xperia devices haven’t been selling as good as Sony expected and due to that fact Sony decided to rebuild its mobile division. “I am deeply sorry for shareholders and I, as a president, am taking this situation very seriously. I’d like to take responsibility by finishing implementing structural reform efforts in this fiscal year and returning the company to profitability in the next fiscal year.” said Sony’s CEO, Kazou Hirai, last month in an interview with the Wall Street Journal as Sony fired 1,000 people and decided to re-structure its business. Mr. Hirai also added that Sony will focus more on a high-end market along with expanding their business to US. Sony already had a presence in US, though only 1 carrier was offering their devices until now and it seems Sony is planning to significantly change that.

According to some new information from China, Sony’s loss for the year is expected to be 5 times bigger, expanding from 50 billion Yen to 230 billion yen (more than $2.1 billion). That same source claims that Sony might withdraw from the Chinese market. The details weren’t given, other than Sony will lay off some people, so we’re not sure if they’re going to withdraw completely or not. I doubt Sony would just leave the biggest market in the world just like that, but who knows, their sales have really been bad over there. Chinese market is extremely competitive, with brands like Xiaomi and Meizu selling really well-made devices at a much lower prices than Sony does for example. Sony has an awful tendency to make a rather well low or mid-range device and then sell it for a really not appropriate price, that could easily be one of the biggest factors company’s sales haven’t been going all that well, especially as far as low and mid-range sectors are concerned.

I think that Sony should re-think this and figure out a better way to make and sell less expensive devices in the biggest markets in the world rather than focusing only on high-end devices. High-end devices alone are a small portion of smartphone sales and I don’t see how Sony intends to grow if they do that, though they never said they won’t be making low and mid-range devices, just that they will focus on high-end models. The fact that they’re withdrawing from the Chinese market points towards a significant focus to the high-end sector though, we’ll see what exactly is Sony planning, though it doesn’t look good thus far. Your thoughts?