Sony to stop making cellular phone handsets for DoCoMo
March 9, 2008
By Ken Worsley
Sony has become the latest firm to announce that it is pulling out of the domestic cellular phone handset market, joining Mistubishi and Sanyo. The Nikkei tells is that Sony has made the decision in order to focus on selling handsets overseas, where greater growth potential exists. Demand for new handsets in Japan is apparently stagnating at about 50 million units per year, and analysts expect that market to begin shrinking.
Sony Ericsson earned about 2.03 trillion from handset sales in 2007, though only about 10% of that figure was generated by domestic sales. Development costs for new handsets are apparently approaching about 10 billion yen per unit, which is simply making production for the domestic market less and less profitable.
How will this move play out for Sony? Clearly, it intends to challenge Nokia, the current global market leader, as well as the other globally successful handset makers. Currently, Sony ranks fourth in global sales and holds about 9% of the market. Can it do better?
Filed Under Technology, Telecom
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[…] ajirich wrote an interesting post today onHere’s a quick excerptSony has become the latest firm to announce that it is pulling out of the domestic cellular phone handset market, joining Mistubishi and Sanyo. The Nikkei tells is that Sony has made the decision in order to focus on selling handsets … […]
Who are these people who think robots and increased productivity will save Japan from itself?
Care to elaborate a bit on that? I think I know what you’re getting at…
10 billion yen to develop a handset? If they sold them at 10,000 yen they’d have to sell a million units to break even.
I don’t get the development cost. They’re all pratically the same.
Robots and increased productivity have nothing to do with addressing sluggish domestic demand. Robots might be good for capex, and perhaps GDP, but what do they buy?
I have to agree with what’s above. 10 billion yen to make a new cell phone unit is crazy. They are wasting money big time. The software is crap, the functionality is stupid and mostly goes unused. They suffer from severe functionality glut.