With its bread & butter TV business now the domain of commodity LCD screens and Apple & Samsung owning all the profits in mobile, it’s tough going for the once-mighty tech conglomerate:
The struggling smartphone maker has written off the entire value of the goodwill associated with its mobile business.
Goodwill covers intangible assets such as a business’s reputation, and is the difference between what a company would be bought for and the value of tangible assets such as stock, factories and cash reserves.
The writedown more than quadruples the net loss Sony forecasts for the year to March 31. It now expects a net loss of ¥230 billion (US$2.15 billion) for the year instead of the ¥50 billion loss forecast in May.
Sony said it would book a ¥180 billion impairment charge in its second quarter for the entire value of goodwill in its Mobile Communications Segment.
Those big writedowns are “paper” losses, but they still represent the premium Sony paid to buy out Ericsson’s share of their mobile partnership. That’s nearly peanuts compared to the $9,000,000,000 loss Google took on Moto, but Google can afford such losses so long as it’s still making gobs of money from its core banner ad business.
Sony, after posting six annual losses in the last seven years, can’t.