Depreciation on disappointing mobile division results in a significant loss for Sony

Sony expects that in the current financial year, which ends in March next year, a significant loss of approximately 1.7 billion euros will have to be written in the books. The main cause is the disappointing sales of midrange smartphones. The mobile division has been written down.

In July, Sony issued a ‘profit warning’ predicting a loss of 50 billion yen, or 360 million euros. Sony has now issued a new warning, in which the electronics company indicates that it expects an even greater loss. Sony expects to end March with a loss of approximately 230 billion yen, or 1.7 billion euros.

The reason for the sharply downward revisions is the disappointing sales of smartphones and tablets. For example, the company has not been able to close major deals with American mobile providers to sell its Xperia smartphones. In August, the electronics group already adjusted the expected sales figures for smartphones downwards. Sony has therefore decided to record a write-off for its mobile division worth 1.3 billion euros.

Sony’s initial strategy to gain market share with mainly midrange smartphones now seems to have definitely failed. The Japanese electronics company wants to focus more on more expensive devices. The company will also release fewer models.