Sony warns of $2.14 bn annual loss, blames mobile unit

Sep 17, 2014

Sony on Wednesday said it would lose $2.14 billion this fiscal year, more than four times its earlier forecast as the Japanese electronics giant blamed a downturn in its mobile phone business.

Sony on Wednesday said it would lose $2.14 billion this fiscal year, more than four times its earlier forecast as the Japanese electronics giant blamed a downturn in its mobile phone business.

The company also said it would cut the smartphone unit's global staff by 15 percent -- about 1,000 jobs -- and not pay dividends for the first time since its shares started trading in Tokyo in 1958.

The surprise announcement that Sony was heading for 230 billion yen net loss in the fiscal year to March 2015 comes only months after it tipped a loss of just 50 billion yen, citing a turnaround in its hard-hit television unit.

Sony has cut expectations for sales in the money-losing smartphone business, which has been hit by weaker-than-expected results in emerging markets, as it faces off against global rivals including Samsung and Apple.

The US tech giant is releasing its newest iPhone in Japan this week, which was likely to boost Apple's soaring presence in the Japanese market and heap more pressure on sales of Sony's rival Xperia offering.

"Other firms are also offering new products with innovative technology -- this business experiences dramatic changes in products and services," Sony chief Kazuo Hirai told reporters in Tokyo.

Hirai --who has been leading a sweeping restructuring of Sony -- said smartphone makers in neighbouring China were another threat forcing down prices in the market.

"The environment is changing and becoming more severe," he said, adding that "Chinese smartphone makers are advancing and they have expanded outside China".

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