Bottom line: Sony might be a leader within the console, home electronics, music, and film industries, but its smartphone arm is a loss-making segment that has been falling further behind in recent years. According to CEO Kenichiro Yoshida, however, that doesn’t mean it’ll be shuttered or sold.

In the year ending March, Sony’s smartphone segment recorded an operating loss of $879.45 million. It currently holds a global market share of less than one percent and ships just 6.5 million handsets annually, mostly to Japan and Europe. That’s a far cry from Samsung’s 291.3 million units and Apple’s 206.3 million, but Yoshida says there are no plans to abandon this part of the business.

“We see smartphones as hardware for entertainment and a component necessary to make our hardware brand sustainable. And younger generations no longer watch TV. Their first touch point is smartphone,” he said.

While most reviewers called the latest Xperia XZ3 a good phone, there’s nothing that makes it stand out from the crowd. Sony might find more success with the Xperia 1, which is aimed at cinema fans (it uses a 21:9 OLED display that supports wide color gamuts) and launches on July 12 for $950.

Sony plans to make its smartphone business profitable across the next financial year. It’s already started cutting costs by ceasing production at its Beijing plant and streamlining sales operations. It also plans to half its workforce and boost the gaming functions of its handsets to attract PlayStation users