Sony Mobile and its Xperia smartphones continue to struggle and weigh down on Sony as a whole while the company is enjoying robust sales and revenues from PlayStation and Sony Pictures. The good news for the division is that sales were up 7% on a constant currency basis in FY2014 to $11 billion. According to Sony, this was mainly due to:

 an improvement in product mix as a result of a focus on high value-added models 

Sony revised its sales multiple times for FY2014 and ultimately ended the year with 39.1 million units shipped, down from their original target of 50 million and right in line with their final expectations of the year. Now the bad news – if the above can be considered good news.

For FY2015, which ranges from March 2015 to March 2016, Sony Mobile expects to ship just 30 million smartphones which would be 23% lower than 2014. That means that in the last 2-3 years, Sony has not only made no progress on moving more units, but they’ve continued to bleed sales and lose ground as well. As Sony focuses more on high-end devices, they believe that,

 due to a reduction in mid-range smartphone unit sales in an effort to improve the profit structure of the segment 

they’ll lose a large percentage of sales volume. For FY2015, Sony is forecasting a revenue decline of 7% to 1,310 billion yen. For the record, Sony posted a revenue of 1,410 billion yen for FY2014. This will result in an operating loss of 39 billion yen for FY2015, an improvement over the of 218 billion yen loss in FY2014.

While 2015 will result in a year of ever lower sales, due to cost cutting measures and a focus on more profitable devices, the division as a whole will result in a far smaller loss with hopes that 2016 will be the elusive year of profitability. Sony Mobile accounted for less than 1% of U.S. phone activations in Q4 2014. Hopefully in turn, Sony will be able to get more aggressive with their mobility strategy with more carrier partners and marketing as they continue to shore up losses.

Discuss:

Do you consider a focus on high-end devices the right strategy for Sony?