Sony announced earlier this week a reorientation of key business and executive appointments effective April 1, 2019. The very brief announcement also contains important information about the company's main business and the changes that will affect it as of next week.
In a surprising move, Sony has decided to merge three of its most profitable businesses with the wireless business. The business units Imaging Products and Solutions (IP & S), Home Entertainment & Sound (HE & S) and Mobile Communications are combined in a single unit called Electronics Products & Solutions (EP & S).
Another important piece of information is the legendary CEO of Sony Kazuo Hirai, the person who made one of the most surprising turnarounds in the Japanese electronics industry will retire in June after 35 years working for the company.
Hirai handed over CEO position to Kenichiro Yoshida a year ago. He retires on June 1
More importantly, his bet on the gambling division paid off. The same applies to the investment in image sensors, since Sony is today one of the largest suppliers of camera components in the smartphone industry.
When Sony retired from its position as CEO, Sony's entertainment and imaging products were more profitable than ever (and still are), but the smartphone business is still bleeding.
Is it a good idea to hide? The Problem Under the Carpet
Reports of a possible sale of Sony's mobile division came up last year, likely to put pressure on the company's current chairman, Kenichiro Yoshida. Today's announcement puts an end to these rumors, but doubts the decision to hide the problem under the carpet.
After a fourth unprofitable fourth quarter, it seems Sony is determined to hide the losses of the mobile sector behind a conglomeration of profitable companies. If you're wondering why Sony still uses smartphones, the Japanese company said that 5G is the technology that could make things better.
How to do this remains to be seen. On the bottom line, Sony's quarterly reports are likely to see less red numbers as the profits of the other three companies are more than enough to hide the losses of the mobile phone business.
What is not covered in the official statement is whether or not This "reorientation" does not mean dismissal among the staff of the mobile department or it is merely an administrative reorganization. As early as December, Sony had laid off 200 people in Europe to cut costs for a range of mobile businesses. A few days ago, the Japanese company confirmed the intention to close a complete smartphone factory in China.
With smartphone factory closed There may be fewer Xperia smartphones available in the market, and although Sony can run unexpectedly well, it can always use third-party manufacturers to supplement inventory, should that be required.
It's obvious that Sony Mobile is not what it once was But if the Japanese company thinks it can save its smartphone business this way, we're up for it.