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Sony to exit the smartphone-factory in China to save costs

Security personnel stand outside a Sony smartphone plant, if workers leave the compound in Beijing, China March 27, 2019. REUTERS/Thomas Peter

BEIJING/TOKYO (Reuters) – Sony Corp is the conclusion of the Beijing smartphone plant, a spokesman said on Thursday, as the Japanese electronics giant cuts costs in an attempt to keep the money-losing handset business profitable from next year.

The company is one of Sony’s few weak spots, and is faced with a loss of 95 billion yen ($863 million) for the fiscal year that ends this month.

The spokesman said that the decision to close the factory was unrelated to the U.S.-Chinese trade tensions. The production will stop at the end of the month, he added, but refused to say how many jobs would be affected by the closure.

As a result of the closure, Sony will only smartphones in a factory in Thailand, but will continue to outsource a part of production to contract manufacturers, the spokesman, who declined to be identified, said.

Some analysts have said Sony is selling the smartphone business given the acute price competition with Asian rivals. The company has a worldwide market share of less than one percent, shipping only 6.5 million handsets this financial year, mainly to Japan and Europe.

But Sony has said that it has no intention to sell what he expected of the smartphones to be a central part of the fifth-generation wireless networks, where the cars and on different devices can be connected. The goal is to make the company profitable in the year beginning April 2020.

Fujitsu Ltd. last year sold its mobile phone business to investment fund Polaris Capital Group, so that there are only three Japanese smartphone-makers – Sony, Sharp Corp and Kyocera Corp – in a global market dominated by Apple Inc, Samsung Electronics Co Ltd and cheaper Chinese rivals.

Samsung late last year said it would cease operations on one of its mobile phone factories in China, as sales in the world’s largest smartphone market slumped.

Reporting by Pei Li in BEIJING, and Makiko Yamazaki in TOKYO; Additional reporting by John Ruwitch in SHANGHAI; Editing by Stephen Coates and Kirsten Donovan

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