Sony hints at smartphone pricing tweaks to counter currency exchange pressure

Sony Mobile Communications CEO Hiroki Totoki said the company could change its smartphone prices and cut even more costs if needs be to counteract the U.S. dollar's rise in value against the yen. According to Reuters, he said that currency shifts are a bigger potential threat to the mobile unit's turnaround than the cutthroat competition in the smartphone industry.

Totoki has promised to make the division profitable in the fiscal year that ends at the end of March 2016. However, he said the fluctuating currencies have raised Sony's costs for raw materials.

"We're seeing a strengthening in the dollar under way. But despite the impact of exchange rates, we would like to limit losses through pricing and lower operating expenses," Totoki said, according to Reuters. "We want to be able to act as early as possible when we sense a change, by changing prices, or altering the product portfolio."

According to research firm Gartner, Sony was the No. 10 global smartphone player in 2014, with 37.8 million smartphones sold, figures that were roughly flat compared with 2013. Sony has struggled to gain traction in China and the U.S., the world's two largest smartphone markets.

Sony confirmed earlier this year it would cut another 1,100 employees from its Mobile Communications business, on top of the 1,000 job cuts it had already announced in that unit. Sony plans to trim the mobile division down to 5,000 employees by March 2016.

Last fall Sony booked impairment charges of around $1.42 billion (¥176 billion) from the mobile business, which helped drag down Sony to an overall net loss. For the current year, the mobile business expects an operating loss of around $315 million.

As Bloomberg notes, Sony has lost the equivalent of $10.7 billion during the past five years amid a series of restructurings. However, Sony CEO Kazuo Hirai said the company is now going to start growing again. Sony expects to post a net profit of around $1.14 billion this fiscal year.

"This year will mark the beginning of our profit expansion phase, as we carry out aggressive investments into promising areas," Hirai said at the investor briefing, according to Bloomberg. He said sales of image sensors, such as those used in smartphone cameras, video game network services and virtual reality gear will lead the company back to growth.

For more:
- see this Reuters article
- see this Bloomberg article

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