Sony Corp has already announced that it wants to turn its loss making mobile handset business into a profit making venture from next year. In that process and with eth aim of cutting down on costs of operations and save money, the Japanese company tech giant has decided to close down its factory in Beijing that makes smartphone. The company announced this on Thursday.
The smartpohone handset manufacturing business of the company has for long been a thorn for it and is among the very few blemishes on the otherwise spotless portfolio of the company. The business unit is set to report losses of about 95 billion yen or $863 million for the current fiscal year that comes to end 31st of this month.
There was no relation between the ongoing trade war between the United States and China and the closure of the manufacturing unit in Beijing, clarified a spokesman for the company while making the announcement of the closure. The spokesman added that all manufacturing activities at the China factory would come to an end by the close of the current month. He however did not want to give any details about the number of job losses because of the closure.
One of its factories in Thailand would be the only manufacturing unit where Son would be producing smartphone following the closure of the Chinese plant. However reports published in the media quoting anonymous sources from the company, claimed that some of the production processes would be continued to be outsourced to contract manufacturers by Sony.
The very severe price competition that is being faced by a number of Asian smartphone makers is the reason that Sony should divest the smartphone business, some analysts have said. The global market share of the Sony smartphones is less than one per cent currently and this financial year, the company has shipped just 6.5 million handsets primarily to customers in Japan and Europe.
Putting aside suggestions and speculation of a sale for its phone handset business, Sony has already clarified that the company has no plans to divesting the unit because the company has plans of transforming the smartphone business into one a center piece for its fifth-generation wireless networks. Its new network technology would help in creating connectivity between cars and various other electronic consumer devices. The company has said that in the financial year beginning April 2020, it would make that business profitable.
After the last year’s deal of the sale of the mobile phone business of Fujitsu Ltd to investment fund Polaris Capital Group, there are now just three Japanese companies in the smartphone making business – Sony, Sharp Corp and Kyocera Corp. The global smartphone market is currently dominated by the likes of Apple Inc, Samsung Electronics Co Ltd as well as Chinese companies like Huawei and Oppo.
The drop in sale of Samsung smartphones in the biggest smartphone market of the world –China, forced the South Korean tech giant to announce last year the closure of its operations of one of its mobile phone plants in China.
(Adapted from EconomicTimes.com)