The performance of Sony's smartphone business has dropped to a new low. The Japanese company shipped only 400,000 smartphones in Q1 2020, marking the lowest quarterly shipment in its history.
For comparison, the company had shipped 1.3 million Xperia smartphones in Q4 2019. So that's a massive 69.2 percent quarter on quarter (QoQ) drop in shipments. Its year on year (YoY) results are equally bad too. The company had shipped 1.1 million smartphones in Q1 2019.
Sony was hoping to sell around 700,000 Xperia phones during the January to March 2020 period. However, it failed to reach the target, and by quite a margin. The COVID-19 pandemic, which has hit the smartphone industry hard, is one of the many reasons for Sony's poor show this past quarter.
The pandemic has not only affected the demand for smartphones but supply and production lines are affected too. However, the underlying fact is that Sony's smartphone business is dying.
The company missed its shipment target for the entire fiscal year 2019 (April 2019 to March 2020). It had initially estimated to sell five million Xperia smartphones in the fiscal year 2019. A poor show in the very beginning means it revised the target to four million and later to 3.5 million. However, it ended up shipping only 3.2 million units throughout the year.
Sony has now refrained from estimating the figures for the fiscal year 2020. The company says the uncertainty surrounding the COVID-19 pandemic has stopped it from providing a forecast.
Sony reports a 57 percent drop in operating profits in Q1 2020
Overall, Sony reported a 57 percent YoY drop in operating profit for the past quarter, down from 82.73 billion yen (roughly $773 million) in Q1 2019 to 35.45 billion yen ($331 million) in Q1 2020.
Its gaming business saw some positivity but it wasn't enough to offset the negative impact made by the COVID-19 pandemic on its other businesses. Sony's PlayStation 4 console is in its seventh year now. The company is reportedly preparing to launch its successor, the PS5, later this year.
Sony is betting on 5G to revive its struggling smartphone business. However, a lot will depend on the popularity of the likes of Xperia 1 II and Xperia 5 II, an upcoming compact 5G phone from the company. These handsets will have to do significantly better if Sony hopes to return to profitability this year.
Sony also recently merged its several other consumer-facing arms, specifically the Mobile Communications, Imaging Products & Solutions, and Home Entertainment & Sound businesses as part of its efforts to improve its finances. It will be interesting to see where Sony's smartphone business heads from here on.