Sony Reveals New Loss Estimate on Struggling Smartphone Business

Sony Corp, the famous electronics giant, revised its loss estimate for the sixth time in its earnings outlook revealed Tuesday. The company said that it expects a net loss of $1.68 billion as it struggles with its smartphone business.

The electronics giant, which once came in third in the handset market after giants Apple and Samsung, revealed that its mid-range models like Xperia have taken a considerable hit in sales and that would cost the company the entire amount of goodwill for the second quarter of the financial year.

Sony increased its net loss estimate for the total financial year to $2.15 billion from the previously predicted 50 billion yen adding that it will not be paying a dividend for the quarter.

News of the widened loss estimate comes after Sony announced a restructuring plan for its mobile communications segment. But since that didn't work, the company now plans on reducing risk, cutting costs and stabilizing the profits through a certain strategy.

Sony plans on "changing the strategy of the MC (mobile communications) segment in certain geographical areas, concentrating on its premium lineup, and reducing the number of models in its mid-range lineup."

Analysts told Reuters that it doesn't matter how many times Sony cuts their forecast but what really matters is how the restructuring and stabilization plans will work for its revenues. But many experts said that this could be bad news for the company because private equity firms would not want to invest in a firm that has such a wide loss range.

Sony's mobile business has taken a hit mainly because its Xperia handset in the U.S. is only available on T-Mobile, the fourth largest carrier in the country. Also with growing number of market players in the handset business, things got rocky for the electronics giant.

Industry experts say Sony should have written down the mobile communications goodwill long back when it spotted a hole in the segment.

"Sony should have done it earlier. A lot of people were questioning why it didn't write down the mobile goodwill earlier as the business hasn't been doing well since the beginning of the fiscal year," Masahiko Ishino, an analyst at Advanced Research Japan Co. told Bloomberg.