Sony shuts up shop in Beijing, shifts smartphone production to Thailand

The move is a cost-cutting exercise to boost the firm’s smartphone business.

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Sony intends to close its smartphone production plant in Beijing within the next few days and shift to Thailand in a bid to shore up the ailing business unit.

A company spokesperson told Reuters that Sony hopes to turn the business around and make it profitable by 2020, and as such, moving the production facility will help reduce operational costs.

The Sony representative added that the closure is not related to the current trade tensions between the United States and China, of which the two economic giants have been waging a sanction and tariff war that has been watched with dread by investors and those involved in the stock market.

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Sony's smartphone unit has continually experienced losses, quarter over quarter. In Q3 2018, the tech giant's mobile communications division lost $141.6 million, and despite the firm's best efforts, competition is fierce and Sony doesn't have a strong presence in the mobile arena.

This does not mean, however, that Sony is planning to throw in the towel. By shifting the production facility, the company hopes to shore up the unit and hold out until the arrival of 5G, in which Sony believes there may be a future for the company's handsets and mobile technology.

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Earlier this year, the Japanese tech giant revealed plans to go on a hiring spree for engineers suitable for image sensor research & development in the Internet of Things (IoT) and smart automotive space.

In total, 40 percent of Sony's new hires over 2019 and 2020 will focus on these areas, which may also benefit from fifth-generation wireless technologies. Sony also plans to invest $5.3 billion into image sensor production over the next three years to give itself a stronger position in the automotive, IoT, and connectivity industries.

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In related news, on Thursday, Sony revealed that Kazuo Hirai, a long-term member of the board and Sony Chairman, is set to retire. Hiari has been with Sony for the past 35 years and after taking on the position of CEO in 2012 and swinging the firm back into profitability, the executive handed over the reins to Kenichiro Yoshida last year.

"Since passing the baton of CEO to Yoshida-san last April, as Chairman of Sony, I have had the opportunity to both ensure a smooth transition and provide support to Sony's management," Hirai said. "I am confident that everyone at Sony is fully aligned under Yoshida-san's strong leadership, and are ready to build an even brighter future for Sony."

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