Sony has long been one of the leaders in smartphone technology, often being first to market with new features and functions. Now, however, the company is facing billions in financial losses (they expect to lose a whopping US$2 billion in 2014) and perhaps an even more worrying market share decline over the past two years. As it turns out, Sony now feels the need to address the first concern at the expense of the latter. While Sony once had the goal of becoming the third-largest smartphone brand, the company has had to rethink that goal – by all public estimates, they are not even in the top 5. As Hiroki Totoki, head of Sony’s mobile unit said in comments to the Wall Street Journal, “To make the business profitable even if we face declines in sales by 20 percent or 30 percent.”

In many ways, Sony’s strategy is an echo of Samsung’s recent change. Cutting down on the number of smartphone models produced with a focus on the high-end, high-margin smartphones they are still competitive in. In addition, while Sony has a strong presence in Europe and Japan, it does not have a significant presence in the Chinese and US markets – the two biggest at the moment. According to the Wall Street Journal, those two markets combine for about 6 percent of Sony’s global smartphone sales.

With Sony reducing the number of models it offers in smartphones, where will internal investment go? It could be that the investments will be re-routed to the divisions of video game and device components, which makes the camera sensors for iPhone. Regardless of the strategy’s outcome, it appears as though Sony will focus on existing markets like Europe – indications are that the smartphone division may exit China entirely – and fast-developing markets like the Middle East and Africa.