The smartphone business of Sony is struggling, and next year will be the division's make-or-break year, according to Sony Corp. CEO Kazuo Hirai.
Hirai has been able to successfully breathe new life into Sony, turning around years of losses into strong outcomes due to the implementation of cost-cutting initiatives, dropping weak businesses such as Sony's PC division and the continued success of the company's image sensors and video games.
However, the smartphone business of Sony has not been a part of the revival, as it continues to struggle.
"We will continue with the business as long as we are on track with the scenario of breaking even next year onwards," Hirai said to reporters, adding that if the smartphone division is not able to break even and turns in a loss, Sony would consider alternative options for the business.
Hirai also said that while there has been progress in turning around Sony's electronics business, as the effects of three years of efforts in restricting the company are starting to show. However, there is a further need in restructuring the smartphone division.
A spokesman for Sony, Yoshinori Hashitani, said that there is still a chance for the smartphone division to turn in a profit for the next fiscal year through additional cost cuts.
Hashitani added that the restructure of the smartphone division is going as planned, and that the company is aiming for the business to become profitable in the next fiscal year. Currently, Sony has no plans to exit the industry.
Sony, along with several Japanese electronic device manufacturers, have been struggling in the competition against Asian rival companies that release cheaper devices such as Xiaomi and Huawei, as well as against powerhouses Apple and Samsung.
According to data from the company last year, Sony smartphones, including the Xperia-branded devices, only took up 17.5 percent of the Japanese market and less than 1 percent of the North American market.
Earlier in the year, Sony even decreased its current fiscal year forecast for its mobile communications division from a loss of 39 billion yen (about $325 million) to a wider loss of 60 billion yen (about $500 million), signaling the company's languishing confidence in the business.
Sony suffered a big blog earlier in the week with the announcement of the cancellation of the Xperia Z4v, which would have been the only version of the company's mid-2015 flagship device in the United States that it was planning to release under Verizon. The smartphone could have allowed Sony to increase its presence in the mobile market of the United States.
