May 27, 2015 / 6:32 AM / 2 years ago

Sony mobile executive: pricing tweaks, cost cuts to cope with dollar's rise

Sony's new Xperia Z4 smartphones are displayed at the company headquarters in Tokyo April 20, 2015. REUTERS/Toru Hanai

TOKYO (Reuters) - The head of Sony Corp’s (6758.T) loss-making mobile telecoms unit plans to tweak handset prices and cut costs if need be to absorb the dollar’s sharp rise versus the yen, citing currency shifts as a bigger potential threat to the Japanese electronics maker’s efforts to turn the business around than competition.

Hiroki Totoki, who has vowed to turn the unit profitable in the year ending March 2016, told investors about his plans to counter foreign exchange fluctuations at a briefing in Tokyo on Wednesday. Close to eight-year highs versus the yen, the dollar’s surge causes problems for Sony’s mobile business because it raises the cost of raw materials and parts.

“We’re seeing a strengthening in the dollar under way. But despite the impact of exchange rates, we would like to limit losses through pricing and lower operating expenses,” said Totoki. “We want to be able to act as early as possible when we sense a change, by changing prices, or altering the product portfolio.”

Totoki’s efforts to fix problems at the long-struggling business, mainly by cutting costs and winding down in markets where Sony sees little chance of being profitable, are part of a lengthy restructuring effort across the whole of the company that is now beginning to bear fruit.

After years of losses, the company expects a net profit of 140 billion yen ($1.14 billion) this year.

Sony has struggled in recent years with weak sales in areas such as smartphones and TVs amid tough competition from cheaper Asian rivals, as well as industry leaders like Apple Inc (AAPL.O) and Samsung Electronics (005930.KS).

Heavy losses at the mobile division were blamed for the group’s net loss in the fiscal year ended March 2914. For the current year, the mobile business expects an operating loss of 39 billion yen, while the company as a whole forecasts an operating profit of 320 billion yen.

Reporting by Ritsuko Ando; Editing by Kenneth Maxwell

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