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Sony expected to remain in China despite job cuts, local competition

After its dismal quarterly results, the Japanese electronics company will no longer make smartphones specifically for Chinese consumers, but is expected to continue peddling its wares in the world's largest smartphone market.

Sony is expected to remain in China's smartphone market even after announcing plans to cut jobs and amid increasing local competition. 

Following a dismal quarterly earnings report last week, the Japanese electronics company said it would no longer make smartphones specifically for the Chinese market and was slashing the headcount of its mobile communications business by 15 percent, or about 1,000 jobs. How many of these will be in China is unknown, although a local employee said job cuts could impact its development and sales operations, said China Daily.  

According to the report, weak smartphone sales in the Asian market pushed Sony to revise its global smartphone sales target down to 41 million units from 43 million. 

Despite the bleak outlook, and increasing competition from Chinese manufacturers, analysts said the Japanese vendor would continue to have a strong presence in the market, which is the world's largest smartphone market and was once a lucrative cash-cow for Sony.  

According to Gartner, 395 million smartphones are expected to be sold in China this year, accounting for 31.5 percent of overall smartphone sales globally. In total, about 443.5 million mobile phones will be sold in the country, bringing the total number of mobile phones to over 1.07 billion.

Citing research firm Canalys, China Daily said Sony had dropped out of the top 10 smartphone makers in China by shipment, moving less than 1 million units in the third quarter. 

Analysys figures also indicate that Samsung and Apple are the only two non-Chinese manufacturers in the top 10 list, which is led by the South Korean smartphone maker. However, the market share gap between Samsung and second-placed Xiaomi stood at just 3 percent. 

Analysys' market researcher Zhang Hao told China Daily that further sales growth in the country will likely benefit local vendors, including Lenovo Group , Huawei Technologies , Xiaomi, and ZTE , which are seeing exponential growth in their domestic market.