Sony Mobile exits India, other key markets as it aims to revive smartphone business

Sony says it will continue to provide after sales support and software updates to its users in India.

No new Sony phone to launch in India (REUTERS)

Sony will not launch any new smartphone in India in the near future. As its mobile portfolio continues to incur losses, Sony said it is going to defocus regions such as South America, South Asia, and Africa.

The company is aiming to become profitable in fiscal year 2020. To achieve its goals, Sony is going to reduce operational expenditure by up to 50% and "strengthen product appeal by leveraging leading technology from the Sony Group." This also includes ending production at its Beijing plant and streamlining sales operations globally.

"Our focus markets are Japan, Europe, Hong Kong and Taiwan to drive profitability and future prospects in the 5G era. We have ceased sales in Central and South America, the Middle East, South Asia, Oceania, etc. in FY18, but we will keep monitoring the market situations and business feasibility," said the company in a statement.

Sony said it will continue to provide after sales support to its users in India.

"We have ceased sales in India in FY18 but we are committed to continuing customer support operations including after sales support and software updates for existing customers in India. We will keep monitoring the market situation and business feasibility in India," it added.

Sony's exit from the Indian market comes shortly after reports of the company planning to slash smartphone workforce 50% by 2020. This could result in up to 2,000 job cuts by end of the next fiscal year, according to a Nikkei report.

Even though Sony hasn't completely exited the smartphone business, the debacle was long time coming. The mobile business, initially started as a joint venture with Ericsson which Sony took over in 2012, has less than 1% of market share in the global smartphone market. The company was shipping just 6.5 million handsets annually with major focus on markets like Europe and Japan.

"Sony's share in the Indian market was almost negligible at 0.01%. Sony took the right decision to focus on the high ASP (average selling price) markets such as Japan," said Parv Sharma, analyst at Counterpoint Research.

Sony is confident of improving profitability (Sony)

Sony is confident of improving profitability (Sony)

The smartphone business reported an operating loss of 97.1 billion yen ($879.45 million) in the year ended March, lagging rivals such as Apple and Samsung Electronics and weighing on the group's record-breaking profit.

Sony's consumer electronics hardware business "has centred on entertainment since our foundation, not daily necessities like refrigerators and washing machines," company CEO Kenichiro Yoshida said.

"We see smartphones as hardware for entertainment and a component necessary to make our hardware brand sustainable. And younger generations no longer watch TV. Their first touch point is smartphone," he added.

(With inputs from Reuters)