Sony’s inability to sell smartphones is costing it billions

September 17, 2014, 12:28 PM UTC
Sony Corp. Chief Executive Officer Kazuo Hirai News Conference
Kazuo Hirai, president and chief executive officer of Sony Corp., attends a news conference in Tokyo, Japan, on Wednesday, Sept. 17, 2014. Sony widened its full year net loss forecast to 230 billion yen from a 50 billion yen loss and suspended its dividend after writing down the value of its smartphone business. Photographer: Noriyuki Aida/Bloomberg via Getty Images
Photograph by Noriyuki Aida — Bloomberg/Getty Images

All is not well at Japan’s flagship electronics maker.

Sony has projected its current fiscal-year loss will widen to more than $2.1 billion, a bigger loss than previously expected, as the Japanese company trims the value of its mobile communications business.

The company said it will book an impairment charge of about 180 billion yen ($1.7 billion). The company is shifting gears in the mobile segment, now focusing on reporting more stable profits and concentrating on its premium lineup, while reducing the amount of models in its mid-range lineup. Sony had previously admitted sales of its mid-range smartphones, intended for emerging markets, hadn’t been as strong as the company had hoped.

The mobile-phone business was Sony’s largest sales contributor last year, and was also the company’s most profitable electronics division just a year ago, according to The Wall Street Journal.

In the past, Sony has said the company needs to expand its smartphone business because many areas in which it competes — including the cameras and video games markets — are closely tied to mobile devices, the Journal has reported. Sony isn’t expected to exit the smartphones business, but is expected to be more selective about which countries it targets and which models it debuts.