Sony to reduce mobile business, lay off employees

Japanese consumer electronics giant Sony Corp is set to downsize its mobile business in China as fast-growing local competitors have dampened the company's ambition of making a big fortune in the world's biggest smartphone market.

According to a statement e-mailed to the Global Times Sunday, along with shrinking its business in the China mobile unit by a large margin, Chinese employees will be let go, accounting for a considerable part of Sony's global layoff of 1,000 personnel.

Despite the trimming and restructuring, Sony said it still regards the Chinese market as a key one.

China, along with the US and Japan, are regarded as the company's top three markets, and the company would continue strengthening its operations in China in terms of R&D and marketing, read the statement from Sony's China branch.

Some analysts, however, said that Sony's smartphones would likely be moved out from the fiercely competitive market sooner or later.

Sony is not only finding it hard to catch up with high-end players led by US-based Apple, but also feels heavily squeezed by nimble local smartphone manufacturers such as Xiaomi, Huawei and Lenovo, Wang Jun, an industry analyst with Beijing-based market research firm Analysys International, told the Global Times Sunday.

A report by Analysys International showed in August that in the second quarter of the year, South Korea's Samsung seized a 15.4 percent share, leading China's smartphone market by sales while Beijing-based Xiaomi and Lenovo ranked second and third with 13.5 percent and 10.8 percent respectively.

Sony's share in the market is less than 2.5 percent as the company failed to make the top 10.

Amid the heated rivalry, Sony's China unit recorded $1.33 billion sales and operating revenue for the second quarter ending September 30, down 0.9 percent year-on-year, according to the financial report filed on the Sony website Friday.

It also cut its global sales forecast of smartphones for the fiscal year ending March 31, 2015, to 41 million from 43 million, noting that the downward revision is mainly for sales in China.

The company will stop the development and sales of China-only mobile phones, but it said in the statement that it would still consider selling its regular handsets in the market.

"If Sony stops customizing mobile phones for Chinese consumers, the company would find it hard to attract new customers or even keep its existing ones, making its performance in the market become even worse than at present," said Wang.

In addition, it may be unable to strengthen ties with China's three telecom carriers, which prefer customized phones to attract price-sensitive customers and are widely considered as the major selling channels by domestic phone vendors, he noted.

But currently, it seems that Sony's smartphones still have a niche following in China, appealing to people who used to use the company's personal computer and portable music players.

Wang Yang, a 29-year-old Beijing resident, is one of them and still trusts the quality of overseas brands.

"After my iPhone 4 ran rather slowly, I decided to buy a larger-screen phone featuring a higher-resolution camera. I thought Sony [which is experienced in camera and screen production] could fulfill the need," she told the Global Times Sunday.

According to Sony's financial report, its image sensors, which were increasingly adopted in iPhones and Chinese-made handsets, led the unit to become the biggest earners in the company's electronics division.