Sony will close its smartphone plant in Beijing, China, in the next few days as the Japanese electronics giant aims to cut costs in the loss-making business, Reuters reported.
Sony will shift smartphone production to its plant in Thailand in a bid to halve costs and turn the smartphone business profitable in the year from April 2020. A Sony spokesman said the decision was not related to Sino-U.S. trade frictions.
Sony’s smartphone business is one of its few weak spots and is bracing for a loss of 95 billion yen ($863 million) for the financial year ending this month.
Mobile Communications division, which sells smartphones, of Sony is expecting revenue of 723.7 billion yen and operating loss of 27.6 billion yen for the fiscal year ending March 31, 2019.
Sony earlier said the company’s Mobile Communications sales are expected to be lower due to a downward revision of smartphone unit sales mainly in Japan, Europe and East Asia. Sony is also forecasting a operating loss for the smartphone business unit.
Sony’s total sales decreased 37 percent year-on-year to 137.2 billion yen in Q3 fiscal 2018-19 primarily due to a decrease in unit sales of smartphones. Sony also reported an operating loss of 15.5 billion yen compared to operating income of 15.8 billion yen in the same quarter of the previous fiscal year.
Sony has a global smartphone market share of less than one percent, shipping just 6.5 million units this financial year mainly for Japan and Europe.
Sony has said it has no intention to sell as it expects smartphones to be central to technologies for fifth-generation wireless networks, where cars and various devices would be connected.
Among Japanese electronics companies, Fujitsu last year sold its mobile phone business to investment fund Polaris Capital Group.
That left three Japanese smartphone makers – Sony, Sharp and Kyocera – in a global market dominated by Apple, Samsung Electronics and Chinese rivals such as Huawei, Xiaomi, Vivo and Oppo.
Samsung last year said it would cease operations at one of its mobile phone plants in China, as its sales in the world’s biggest smartphone market slumped.