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Sony CEO: Why we need to stay in smartphones

Sony is committed to the smartphone sector despite increasing calls for the company to cut its losses, CEO Kazuo Hirai told CNBC at the IFA 2014 tech show in Berlin, where it unveiled its latest smartphone.

The firm launched a slew of products including the new flagship Sony Xperia Z3 smartphone, a fitness tracker that can make and take calls, numerous lens cameras - bodiless cameras that clip on to smartphones - and the NWZ- A17 Walkman digital music player.

While Sony's share of the smartphone market is small, Hirai told CNBC on Wednesday that it's important for the firm to stay in the business to keep pace with technology trends.

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"There will come a time, when markets are moving from smartphones, perhaps to wearables or some other way in which the folks are going to be using the device to communicate. And we believe that in order for us to bridge into that generation... we need to be in the smart phone business... so that we keep our relationship with our carriers, our suppliers,and obviously with our consumers," he said.

Sony had a 2.1 percent share of the global smartphone market in 2013 compared with Samsung's 31.1 percent and Apple's 13 percent, according to Gartner statistics.

Refocusing

Once considered a pioneer in electronics innovation, Sony fell on hard times over the past few years amid intense competition. Last month, a warning about the outlook for its smartphone division in its quarterly earnings report led to increased calls from investors including billionaire Daniel Loeb for the firm to exit unprofitable sectors and refocus on its strengths.

President and CEO Kazuo Hirai delivers a keynote address at the 2014 International CES at The Venetian Las Vegas on January 7, 2014 in Las Vegas, Nevada.
Getty Images
President and CEO Kazuo Hirai delivers a keynote address at the 2014 International CES at The Venetian Las Vegas on January 7, 2014 in Las Vegas, Nevada.

That is exactly what Sony is doing by unloading its failing PC division and spinning off its TV division, Hirai said, noting its key focuses are now the TV business, video gaming and network services, digital imaging and mobile.

"We're trying to refocus the electronic business on those areas where we believe we can make a huge difference," he added.

Sony is making progress on its turnaround plan despite criticism that the process is taking too long, Hirai said.

"This is a very large business," he said. "Sometimes maybe things take longer than perhaps one is expecting...So we're moving the bar in a lot of different fronts, and we're making some progress."

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New offerings

Sony unveiled its third attempt at a 'smart watch' at the IFA 2014 conference. Samsung has also launched several smart watches, while Apple could follow suit at next week's launch event.

Thus far smart watches have met a lukewarm reception from the tech industry, but Hirai said that most players are still experimenting.

"The entire industry, including Sony, we're still... coming out with a lot of different products, and trying to really understand where the sweet spot is," he said.

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