Sony Mobile Boss Totoki: ‘We Will Never, Ever Sell or Exit’ Mobile Business
In February, Sony Mobile head Hiroki Totoki, only four months on the job, told the world that his boss was full of it.
Two weeks earlier, Sony chief executive Kazuo Hirai offered up that the iconic but struggling vendor, which already had sold off its money-losing Vaio PC unit, might, in a profitability push consider an “exit strategy” for is flailing smartphone business. But Totoki emphatically put all that talk to rest.
“At the beginning of February there was speculation about a sale of Sony Mobile,” Totoki said at the time. “It’s completely untrue.” In the ensuing months, his posture on Sony’s mobile business hasn’t wavered one bit.
Totoki is a 28-year company veteran with prior executive roles in planning and finance, strategy, development and design and innovation. He apparently has a reputation as a turnaround specialist.
In this case, Totoki might need a magic wand. In February, Sony confirmed it will cut another 1,100 jobs from its Mobile Communications business in addition to the 1,000 jobs it previously announced as part of an overall layoff, reducing headcount by 2,100 employees early in 2016. The layoffs will trim about 28 percent of the mobile unit’s staff, leaving its headcount at some 5,000 employees.
Totoki, in a new interview with Arabian Business, talked about his evolving strategy for Sony Mobile. Here are some highlights:
On his (relatively) new job:
“I was told that I would become CEO of Sony Mobile in, I think, October, and I was told that this company needs to be turned around as quickly as possible.”
On his financial strategy:
“We are trying to decrease our costs by 30 percent to the end of 2016, and reduce our headcount by 20 percent.”
“We have set out our plan already and are just starting to execute it. This year, 2015, is a year of big transformation, and we will try to complete this transformation by the end of the year, and hopefully see an improvement in financial performance in 2016.”
On the sell-off mobile unit rumors:
“The speculations arose because in 2014 we made a huge loss as a mobile business.”
“Before that rumor, we exited the VAIO business, which was the PC business. That led people to think that Sony would exit the smartphone business, as well. But the smartphone business is very different from PCs.”
“In that sense we will never ever sell or exit from the current mobile business.”
On competition and new smartphone development:
“When we introduced the Z3 to the market it was very well accepted. But now we see a lot of emerging players, including Chinese manufacturers trying to make good quality smartphones, so the competition has become severe.”
“We’re trying to introduce new technology in the future and diversify our product even more. The quality and strength of the product is always the starting point as far as strategy goes for the company.”
“We’ve got a good feel for the technology and we’re not limited to the smartwatch. We include smart wear, smart products, and smart devices, and there are many more things now being made for the IoT (Internet of Things) era.”
“Now we try to develop smart devices that are connected to the smartphone. In the future there will be categories of products that will connect to the network, connect machine to machine, connect machine to human, and connect human to human.”
“That sort of connectivity will expand and we will try to develop even more categories in the future. That’s one major focus for this company. It’s a big future strategy.”