Sony Corp. (NYSE:SNE) Counts Annual Loss

Sony Corp. (NYSE:SNE) has cancelled dividends for the first time ever in half a century. It estimated that due to inconveniences in the cell phone division it will meet a yearly loss of more than ¥230bn (£1.3bn).

Moreover, it is expecting a profound loss in the fiscal year to March 2015 in comparison to an estimate of a ¥40bn operating profit.

Kazuo Hirai stated that it is the first time that they have been unable to pay the due dividend and as administration they feel intensely responsible for this decision. He further said that Sony (NYSE:SNE) intends to resume the dividends at its earliest convenience.

Hirai mentioned that Sony (NYSE:SNE) would cut off 15 percent of the staff this year as the mobile division strategy is under consideration once again. In July, Sony (NYSE:SNE) had to cut its cell phone deals for the year, from 50m to 43m; which had scarcely changed from 42m, dispatched in the year to April 2014

Hirai also stated that alongside gaming and cameras, the mobile division of Sony (NYSE:SNE) will be of central importance in the business. Now, Sony (NYSE:SNE) aims to particularly concentrate on lesser geographical regions.

This reduction in assets came after Sony (NYSE:SNE) observed the cut throat competition being offered by its contenders in the smartphone market where Samsung (KRX:005930) and Apple (NASDAQ:AAPL) have been turning revenues and profits overwhelmingly. In this scenario, companies like Sony (NYSE:SNE), LG and HTC are under intense pressure from Chinese manufacturers such as Huawei (SHE:002502), ZTE (CVE:ZTE and Xiaomi.

Francisco Jeronimo, who is a smartphones analyst at the research company IDC thinks it would not be a smart move from Sony (NYSE:SNE) to retreat from the US market even though that the company is a weak in terms of sales. It should stay in the US because of its other products.

Jeronimo also concluded that they have a stronghold in the European market and have been producing rewarding results. However, these write downs demonstrate that turning profits at the top of the line is conceivable only for Apple and Samsung as these companies manage to sell smartphones for over £360. The cost of phones is falling globally as cheap phones have become a success in countries such as India and China.

Hirai assumed his position in 2012 guaranteeing to turn the business around by concentrating on its mobile, gaming and cameras; he auctioned off its computers business and moved the TV business into a subsidiary organization.

Yoshida had already raised a warning flag about the misfortunes of Sony (NYSE:SNE)’s mobile division for this fiscal year, due to which Sony (NYSE:SNE) cut its profit standpoint for smartphones to zero for the year. However, the rest of the forecast was kept as it is.

Sony (NYSE:SNE)’s top selling Xperia mobile phones have been negatively affected by the fact that the brand does not have more than one carriers in the US market. These phones can only be found under T-mobile US – the same is the case in China.