Report: Pressure is on for Sony to exit smartphone business

• Shareholders and outside analysts are encouraging Sony to shed some of its failing businesses.
• Sony's mobile division is struggling the most while there's disagreement over what to do with its film business.
• Sales are dropping for the PlayStation 4, which will force Sony to act soon.

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It's no secret that Sony's incredibly successful gaming division — fueled mostly by the Sony PlayStation 4 — is helping to keep its other struggling divisions afloat. Those struggling divisions include its mobile arm, which recently saw huge layoff reports and got shuffled into another division to help hide its losses.

However, it appears that even the might of the PlayStation is starting to fade as Sony altered revenue targets to compensate for dwindling sales of the five-year-old console (via Reuters). The alteration has instigated pressure from both inside the company and out to drop the dead weight — including its mobile products.

Third Point, LLC, a hedge fund operated by Daniel Loeb, is building a stake in Sony right now to push the company to shed some businesses. Third Point is primarily interested in offloading the motion picture division at Sony as there are some buyers interested in obtaining the properties under the Sony banner. A sale like that could trim the fat as well as give a good cash boost.

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There's no direct report that Third Point is also planning to push the company to drop its mobile arm, but Jeffries analyst Atul Goyal said in a note last week that "recent reports of activist investors' interest and stake acquisition is likely to put significant, desirable and sustained pressure on Sony to act."

Goyal then specifically called out the mobile division as needing to go. However, he disagreed with Third Point and thought the film business should stay as there's potential for a turnaround. The mobile division, though, is pretty much done in the eyes of investors.

While Sony certainly wouldn't drop its mobile division overnight, it would make sense for it to start trimming things down this year. We'll have to wait to see if this pressure from investors and analysts will be enough to sway Sony CEO Kenichiro Yoshida to make some hard decisions.

The latest Sony flagship smartphone, the Sony Xperia 1, was revealed in February but still hasn't been released.

NEXT: Sony Xperia 10 and Xperia 10 Plus review

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