Sony has had
it tough in the smartphone business. The company decided to go solo in the
smartphone network by acquiring Ericsson’s stake in Sony Ericsson in the year 2011
and renamed the company to Sony Mobile. Soon after the formation of the new
company, Sony aimed to become the third largest smartphone vendor in the world.
Unfortunately the goal was a bit too optimistic and the company has actually
been finding it tough to maintain its sales in the past few quarters. To turn
things around, the new Sony Mobile CEO Hiroki Totoki has decided that the company will shrink its smartphone portfolio in the
coming year and target profit instead of chasing market share like it was doing
so far.
The company
is bracing itself for volumes in the smartphone business shrinking by as much
as 30% in the near future. The aim going forward is to remain profitable and
just maintain presence in the smartphone market instead of targeting market
share or increasing unit sales of smartphones. Sony had already announced plans
earlier this year of cutting down on its mid-range smartphone portfolio and
focusing only on the high-end segment. In the coming year, the number of
entry-level and mid-range Xperia models could be limited to just a few.
In its
previous announcement, Sony revealed that the Xperia business was the main
reason behind its losses and it was not expecting to make any profits from the
mobile business this year and would be happy if it could get the business to
break even this financial year. It has also lowered its full year smartphone
sales forecast twice this year. As part of its turnaround plan the company will
focus on the gaming and image sensor business to get the company back into
profit.
Sony’s hopes
of becoming the third largest smartphone OEM were never going to come true
unless the company focused on the two key smartphone markets – China and USA.
Sony has had limited presence in both markets. Sony did try launching a few
exclusive Xperia handsets for the Chinese market but it couldn’t win much
market share and has decided to move away from the Chinese market owing to the
stiff competition there. As far as the US market goes, Sony has never had a
good presence in the market and hasn’t been able to strike a deal with all the
major US carriers. Its Xperia smartphones have so far been available only
through AT&T and T-Mobile. The relationship with AT&T didn’t last long
and while it continues to sell Xperia flagships through T-Mobile, which alone
isn’t enough to make an impact in the American market as T-Mobile has the
smallest market share among the major US carriers. The lack of extensive
marketing has also been a factor behind the slowing sales of Xperia
smartphones. Even though the company now spends a lot more on marketing its
latest smartphones, initially Sony had ignored the need to properly market its
smartphones to the global consumers.
No comments:
Post a Comment