Smartphone business indispensable to brand portfolio: Sony CEO

A visitor tests a Sony Xperia 10 smartphone at the Mobile World Congress in Barcelona on February 27, 2019. (AFP)
Updated 22 May 2019
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Smartphone business indispensable to brand portfolio: Sony CEO

  • Sony’s smartphone business reported an operating loss of ¥97.1 billion ($879.45 million) in the year ended March
  • Sony is beefing up gaming functions of its smartphones to tap customers of its successful PlayStation gaming business

TOKYO: Sony sees the smartphone business as indispensable to its brand portfolio, its CEO said, bucking calls from some investors that the Japanese electronics firm should scrap the money-losing business.
The smartphone business reported an operating loss of ¥97.1 billion ($879.45 million) in the year ended March, lagging rivals such as Apple and Samsung Electronics and weighing on the group’s record-breaking profit.
Sony’s consumer electronics hardware business “has centered on entertainment since our foundation, not daily necessities like refrigerators and washing machines,” Kenichiro Yoshida told a group of journalists on Wednesday.
“We see smartphones as hardware for entertainment and a component necessary to make our hardware brand sustainable,” he said. “And younger generations no longer watch TV. Their first touch point is smartphone.”
The business, originally a joint venture with Sweden’s Ericsson that Sony took full control of in 2012, has a global market share of less than 1 percent, shipping just 6.5 million handsets annually, mainly to Japan and Europe, according to Sony’s financial statement.
As Sony aims to make the business profitable next financial year, it ceased production at its Beijing plant and streamlined some sales operations globally.
Sony is beefing up gaming functions of its smartphones to tap customers of its successful PlayStation gaming business.
Yoshida also said he is confident in improving profitability at the pictures business.
Separately, Reuters reported Daniel Loeb’s hedge fund Third Point is again building a stake in the company, as part of its second campaign for change at Sony in six years.
Third Point wants Sony to explore options for some of its business units, including its movie studio, which the fund believes has attracted takeover interest, people familiar with the matter previously said.
“It was good that in the past Third Point came in and we had various discussions on the pictures business,” Yoshida said. Sony has sharply improved disclosures of the pictures business since then, he said.
The management team of the pictures unit has been “reshuffled almost entirely over the last three or four years,” Yoshida said.


Saudi Arabia relaxes ownership limits for foreign investors

Updated 26 June 2019
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Saudi Arabia relaxes ownership limits for foreign investors

  • Capital Market Authority chairman, Mohammed El Kuwaiz said, ownership in the Saudi capital market by financial investors had increased threefold this year
  • The move aims to help enhance the market’s efficiency and attractiveness and to expand the institutional investments base

RIYADH,: Saudi Arabia has relaxed a 49% limit for foreign strategic investors in shares of listed companies, aiming to attract billions of dollars of foreign funds as the Kingdom opens up the region’s largest bourse to a more diverse investor base.
The country has introduced a raft of reforms in recent years to make its stock market, the region’s biggest, attractive to foreign investors and issuers.
The move aims to help enhance the market’s efficiency and attractiveness and to expand the institutional investments base, the regulator, the Capital Market Authority (CMA), said in a statement on its website.
The Saudi stock market, which opened to foreign investors in 2015, has seen an upsurge in foreign fund flows since the start of the year due to its inclusion in the emerging markets indexes.
“In the beginning of this year, we had only one percent ownership in the Saudi capital market by financial investors, today it is over three percent, that’s more than a threefold increase,” CMA chairman, Mohammed El-Kuwaiz told Reuters in an interview.
“Our hope is that we can see a similar increase in terms of pace and magnitude as we start to create more avenues for foreign investors to come in to the market,” he added.
There will be no minimum or maximum ownership limit, although the owners must hold the shares for two years before they can sell.
Kuwaiz said huge demand from non-financial foreign investors pushed the CMA to grant approval on an exceptional basis to a number of strategic foreign investors to increase their holdings in Saudi listed companies. These included transactions at an insurance firm and a local bank.
Foreign investors have been net buyers of Saudi equities over the past few months, with purchases worth 51.2 billion riyals ($13.6 billion) until May 30. They currently own 6.6% of Saudi equities, of which 3.15% is owned by strategic foreign investors.
Local shares were incorporated into the FTSE emerging-market index in March and the MSCI emerging market benchmark in May this year. The country’s Tadawul All-Share Index is up 11 percent year-to-date.
Strategic foreign investors can take stakes in listed companies by buying shares directly on the market, or through private transactions and via initial public offerings.
Asked how this move would reflect on the Aramco IPO, planned for 2021, Kuwaiz said it would assure that the market has the physical regulatory and investor infrastructure to accommodate a company as large and as extensive as Saudi Aramco.