What you need to know
Analysts at IDC reported in a Bloomberg newsletter that Sony’s smartphone business saw sales fall 40% last year. The decline is expected to continue as Sony’s Xperia brand struggles to compete with the likes of Apple and Google. Sony is teasing the launch of new Xperia smartphones in an announcement on May 15, which are rumored to be targeted at a more mainstream customer base.
Sony is just days away from the launch of its new Xperia smartphone, and the announcement is likely to have a major impact on the company’s future mobile product rollout. Rumors and leaks suggest that the phone will be a slight departure from the company’s typical mobile phone strategy, which focuses on its photography technology and targets niche and premium markets. The shift in strategy comes as Sony’s mobile sales continue to take a big hit, according to data shared with Bloomberg Newsletter.
Masafumi Inbe, an analyst at IDC, spoke to Bloomberg about Sony’s struggles with the Xperia, which have even extended to the domestic Japanese market. Apple has a strong user base in Japan and has successfully introduced the iPhone there. Now, Google’s Pixel growth plans include targeting markets like Japan.
Sony is no longer a household name in the smartphone industry, and these developments have further damaged the company’s position in the market. It is no longer the leader in smartphone shipments and is going backwards rather than forwards. Part of this may be due to the direction of the Xperia brand, which only appeals to a small minority of people.
But changing course and making the upcoming Xperia 1 VI more mainstream may not be the answer: if Sony can’t compete with the big brands while offering a unique smartphone, why compete with a copycat device of every other smartphone out there?
Sony’s mobile phone sales fall sharply
(Image courtesy of Evan Blass)
The global smartphone market has been subject to frequent declines and peaks in recent years, greatly affected by fluctuations in the economy and global situations. However, Sony’s mobile sales have not only declined slightly compared to past years, but have declined significantly. According to Imbe, Sony’s mobile sales are down 40% year-on-year in 2023.
Inbe said a similar decline is expected this year, which doesn’t bode well for the future of Sony’s mobile products: A combined 80% drop in sales over two years would be disastrous.
One of the main reasons for the alarm, Imbe said, is Sony’s poor performance in Japan, where it sells about 1 million mobile phones each year, compared with 30 million smartphones sold annually.
Sony doesn’t report smartphone sales separately in its financial reports, making it difficult to get a complete picture of its business, but it’s clear that mobile devices won’t be the company’s core business in 2024. Still, Sony isn’t showing any signs of retreating from the smartphone market.
“Our mobile communications business is not just a terminal business; we recognize it as a business with important communications technologies that contribute to the entire Sony Group,” a Sony spokesman told Bloomberg.
“We believe that the communication technology we have honed through smartphone technology is an essential element for connecting creators with customers and providing entertainment regardless of time or place.”
Something has to change, and if the leaks are correct, that something will be Xperia’s strategy. Xperia’s current positioning towards ultra-premium camera enthusiasts doesn’t seem to be working, but it’s unclear what will work in this late stage of the smartphone race.
Sony’s Xperia brand targets a market where there is barely any
(Image provided by Sony)
In theory, Sony’s plans for the Xperia lineup sound great: the company already makes some of the best cameras in the industry, so why not put them in its smartphones? It’s a great idea, but it hasn’t worked out because Sony’s Xperia brand only targets the middle tier of its two biggest markets.
Those who don’t care much about a separate camera will buy a flagship phone, as the Google Pixel 8 Pro or iPhone 15 Pro Max cameras are good enough for most situations. Meanwhile, those who really care about cameras will buy a DSLR or mirrorless camera in addition to their phone. As Xperia sales show, there’s a proven small number of people who need more than a smartphone, but not as much as a dedicated camera.
As a personal example, I am exactly the type of buyer that the Sony Xperia series would appeal to. I have a mirrorless camera (obviously Sony) that I use for work and for fun. I’m not a photography buff, so I use my Sony a6400 mostly in auto mode. That being said, I’m not looking to replace my smartphone or mirrorless camera with an Xperia. For my basic needs, a Sony Xperia smartphone is inferior to the smartphone and camera I currently have. So what’s the point?
The Zenfone 11 Ultra proves that making Xperia mainstream solves nothing
(Image source: Apoorva Bhardwaj / Android Central)
Unfortunately, I don’t have a solution for Sony. I feel like in 2024 there will only be a handful of brands that can truly compete in the mainstream market. It looks like Sony is trying to do just that with the next Xperia, but it might not be the best option.
We saw Asus make a similar pivot with the Zenfone 11 Ultra, but the general reception was less than positive. Rather, it signaled that Asus had abandoned a small but vibrant niche and become like every other flagship smartphone. And despite being one of Asus’ best phones ever, the Zenfone 11 Ultra failed to stand out.
If Xperia tries to compete on an equal footing with Apple, Google, etc., it will lose. The brand’s only chance at this point is to stick with the status quo and make niche, unique smartphones that actually satisfy a specific customer base, but that’s already becoming a losing battle.
