We all know the huge loss that Mobile took last quarter for Sony, and that's unsustainable. But there is overall strategic worth being in the mobile market I think. So if Sony can work mobile into a position of only making small losses so as to never negate the profitability of all the other divisions do you think it's a sustainable long term strategy?

In other words, are there good reasons to be in mobile phones (tablets perhaps not so much) other than just profits that justifies an inability to make a profit on mobile phones?

Perhaps in the very long term focussing for now on product development and market share in smartphones rather than profitability will eventually lead to modest profitability.

They should probably stop making ten million phones and just cut it down to one product line.

In their current state, no.

Sony needs to stop making [final goods] and completely retructure their company to make only [producer goods]. If they keep making final goods they will eventually die. It's as simple as that.

Do people actually research anything on this site before posting a topic? Mobile had a small but positive operating income this quarter, and overall they have been profitable (but on in the same league as Samsung). The huge loss this quarter was due to a writedown in goodwill of the mobile division. Goodwill is basically the difference between a businesses assets and its perceived worth, and is often referred as the value of the brand itself. As an example, if company A buys company B for $10 million, and company B has $2 million in assets, then company A accounts for this by registering a goodwill worth of $8 million. However, if later down the track company A reassesses the value of company B (now a subsidiary) and decides its worth only $5million, then the company posts a goodwill writedown of $5 million, and that writedown is treated as a cost. If subsidiary B only made a $3 million operating profit that year, then it would actually be booked as a $2 million loss.

In Sony's case, the goodwill of the mobile business was inflated by how much it cost Sony to buy out Ericsson's share of Sony Ericsson. This in part is due to Sony's desire to take over the mobile venture entirely, meaning that Ericsson knew it could overvalue its share and Sony would still likely buy it. However, now Sony has reassessed the value of mobile and has decided that mobile is only worth what its assets are worth, and as a result has written mobiles goodwill down to zero. As a result, there can be no further writedowns in goodwill for mobile (because its now worth zero) and therefore this is definitely a one-off cost.

In a nutshell, Sony is doing now what it should have done when they bought Ericsson's share out, written down the delta between the purchasing price and the tangible assets they got from the purchase. Sony likely didn't do that because they were already making large losses in television, and due to tax reasons wanted to save that loss for when they started making money (because you only pay tax on profit).

The flipside is that now the writedown has been done, future performance of mobile will be around the same as it was before, profitable but not hugely so. In summary, Sony shouldn't spin off mobile, the large loss this quarter is unrelated to the actual business performance of the mobile division, but merely an accounting necessity born out by Sony spending more on Ericsson's share than arguably it should. If you want to doom mobile, at least wait until they've made a string of losses from an operating perspective.

You realize the mobile division is the only thing that's going to get that company in the green... They need to market....

Problem with sony and mobile is that there approach is all wrong. Every company that has made a mark in mobile always had one stellar break out device. One device that at the time it was released was simply the best phone to get for that year.

Sony has a rely good design basis with teh xperia Z series. The problem is tha they are never quite making the perfect phone and they are never pushing it as hard as they should. There is always just one thing missing with the Z series. And it always has little to no carrier support.

Till sony can capture their own mobile lightning in a bottle, their mobile division will never stand out. What amazes me is that what I think they need to do is so easy that i can't figure out why no one in their company seems to have thought about it.

This was explained over a month ago on Neogaf but I didn't quite get it then. Thank you.

So they did lose money, but it was due to a decrease in the worth of the asset rather than the results of their performance. 

Isn the lose is because their expectations was to high so they just need to accept that they are not that big and make smaller shipments

They were too late to enter the phone market. Now even Samsung is finding it hard to compete so how can Sony do well? They are better off leaving rather than wasting their money trying.