Sony Mobile faces £1bn 'goodwill' shortfall

Sony Mobile faces £1bn 'goodwill' shortfall

There are many plus points to being one of the world's biggest companies, but one unquestionable downside is that even small mistakes can end up costing millions of pounds.

Or one billion pounds, in this case. That's the adjustment Sony is making to its forecasted revenues for the year – and yes, we do mean downwards.

The massive sum is being labelled a “goodwill impairment charge”, and comes directly from its Mobile Communications division.

In plainer English it means Sony thought it would make 180 billion yen (£1bn) more from smartphone and tablet sales than it now looks like it will once the totals for the fiscal year are added up in March.

The electronics giant revealed the news in a press release titled “Sony Announces Revision of Consolidated Forecast for the Fiscal Year Ending March 31, 2015 Due to the Impairment of Goodwill in the Mobile Communications Segment”.

Perhaps Sony was hoping we'd lose the will to live so entirely by the end of that title we wouldn't bother about the details that followed.

The remarkable thing is that the adjustments are to figures Sony only released in July – yes, two months ago. In July it was forecasting an operating income of 140 billion yen (£800), and now it's changed that to a 40bn yen loss – or £200m.

There's another impressively dense block of text about the “background and reason” for the impairment charge, which bemoans a “significant change in the market and competitive environment of the mobile business”.

To sum up, then, Sony released a bunch of impressive new phones and tablets (such as the Sony Xperia Z3, out in the UK this very week), but failed to account for the likelihood that any of its rivals might actually do the same.

It's a tough gig this business game.

Via The Verge

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BananaMannn  Sep. 17, 2014 at 16:17

sony making the same mistake HTC made and releasing new flagships every 6 months

corgi74  Sep. 17, 2014 at 16:34

Stop making phones with an ugly skin and a stupid metal nipple on the side.
Problem solved!!

krogothnx  Sep. 18, 2014 at 00:05

Sony spent forever catching up in the smartphone spec game. Now theyre running in the same leagues as everyone else finally, so what have they done? Released exactly the **** same phone three (arguably four) times in a row, for TWO YEARS

Two years is a freaking long time to not do *something* in the high end. Yes, they have their compact flagships - but I don't think they ever make them to the US, which AFAIK is the world's biggest smartphone market. Hell they barely get the normal flagships over there - I think the last one was a Z1 variant called the Z1S.

Meanwhile, they have nothing notable in the medium or low end - all they do is pump out what are again basically the same phones as 2012 at exactly the same price, except now they do half of them in phablet size range instead. When was the last time anyone saw someone with a phablet that wasn't a galaxy note (or possibly recently, a G3?)

They need a moto G contender. *need*. And work out something that keeps putting them into the 'wow, cool new flagship' category instead of the 'oh, this again' one. Stop with the **** low/mid phones. It's been Moto's strategy and holy hell its worked for them. Push the compacts in america with a $50 contract fee (vs the usual $200 of phones with the same spec) in the meantime.

OK I fixed Sony, next?


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