Sony's 1,000 Mobile Layoffs Should Push Company To Rethink Strategy

Sony Xperia Z3Sony Xperia Z3

According to a Reuters report, Sony plans to cut 1,000 jobs from its mobile division, following a series of quarters in which the company couldn't generate a profit with its smartphones. The jobs will be cut mainly from China and Europe.

All cuts will happen by the end of the fiscal year, ending in March 2016. The company is expected to report these cuts in the February 4 earnings report.

Although Sony has gotten much better at building quality smartphones, the company hasn't been able to compete with the likes of Apple, Samsung, LG, and even HTC, which has much better access to the U.S. market, for example, than Sony does.

Sony has had a hard time entering the U.S. market with its touchscreen smartphones. The U.S. carriers already have firmly established relationships with companies such as Apple, Samsung, HTC, LG and Motorola, and they may not be willing to agree to a deal to promote Sony's phones without major concessions from Sony.

Sony has been able to maintain a relatively positive relationship with Verizon and T-mobile, but even then Verizon usually prefers to have Sony modify the device and the name slightly to make it more uniquely Verizon. This ends up taking away from Sony's brand strength for a certain smartphone model, by splitting that model into different brands. Also, Sony's inability to have a major launch in the U.S. across all carriers, something Apple, Samsung, LG and even HTC are able to do, hurts the popularity of that device in the U.S.

Sony Xperia Z3 CompactSony Xperia Z3 CompactThe Xperia Z flagships have seen some success internationally thanks to their slick designs and long battery life, but they haven't been sold in high enough numbers to make the company's mobile division profitable. This may be due to a lack of a big marketing push. Being unprofitable can create a negative feedback loop for Sony, which means less and less money for R&D and marketing, so future devices could end up even less successful.

The new layoffs may also put further pressure on its mobile division. That may also be a good thing, if it forces the company to come up with with creative new ways to compete against more established smartphone players on a shoestring budget. Smartphone makers often tend to replicate each others' features, which sometimes is a good thing, because it increases quality throughout the industry and more people get to use the same kind of features. When done for too long, though, it creates stagnation in the industry and a lack of true competitiveness.

Sony should continue to focus on delivering 2+ days of battery life across its range of touchscreen smartphones, but it should also renew its focus on cameras. As the provider of smartphone sensors for some of the biggest mobile companies (including Apple), and having a long history of making high-end cameras, Sony has no excuse for not making smartphones with the absolute best cameras on the market.

Yet we often see Sony's flagship devices fall behind Apple and Samsung (and sometimes others as well) when it comes to the quality of shots from its phones' cameras. If Sony wants to turn its mobile future around, it may want to apply its core strengths more intensively in its mobile products.

Update, Jan 28, 10:45am: Updated to include information that Sony is selling subsidized devices through Verizon and T-Mobile.

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