Sony Mobile Will Defocus on India, USA, China, and Brazil

Sony Mobile Hiroki Totoki

That sound you hear is the agonizing moan from millions of Xperia fans as they continue to wait for Sony Mobile to ‘get’ to North America and other small markets like China and India. I hear a few people live in each of those countries.

 However, what hasn’t been made clear up until now is that Sony Mobile also has a regional strategy. Sony did say previously that it was refocusing on certain geographies, but never made it clear exactly which regions it would target. Sony has now confirmed that it expects to defocus on select regions – it explicitly says it expects its businesses in India, USA, China and Brazil to shrink.

Part of the reason for this is that Sony expects FY15-17 CAGR smartphone growth from India, China, Brazil, Indonesia to be just 0.3%. This compares to Sony’s estimate last year of +8.1%, showing just how much expectations have changed in a year. 

Talk about miscalculation, right? Wrong. I don’t think Sony miscalculated their ability to grow 8.1% in those regions. Many companies like Apple have been growing at such a pace in countries like China (obviously not in the US since they’ve been here since 2007). For Sony, the truth is that they hardly exist in any country so they could theoretically grow that much in any given region so to grow 8.1% in any given region, let alone worldwide, is completely feasible.

However, what Sony didn’t take into consideration is their own inadequacies of being able to put together a strategic plan on how to achieve them. I truly think they saw the Xperia X family, the lineup which was hailed as being created from the ground up as the thing that would get them back into the game.

The reality though is that they created what I think is a good lineup that’s far too expensive which I don’t believe they foresaw. For whatever reason, the initial price target Sony had in mind never materialized and so they’ve been left in a situation of offering devices that either just compete or fall just below competitor flagship products that were launched 3-5 months prior. Making matters worse is that by the time Sony’s phones started hitting the market, some of their competitor phones were already seeing price cuts and various promotions, making the Xperia lineup look even less compelling.

If Sony had been able to bring to market the Xperia X family in the same time frame but with $100 less attached to each handset, I think their outlook for the year and the conversations around the new lineup would be drastically different. Keep in mind that Sony would rather lose marketshare than to have Mobile post a loss for the sake of marketshare. In addition to a higher-than-expected price, Sony Mobile clearly continues to lack the leadership it requires to put together retail and carrier partners to help drive sales along side any meaningful marketing plan. Plastering Xperia X around the stadium during the UEFA championship is frankly lazy and wasteful marketing.

 Sony will instead look to focus its growth on East Asia (including Japan), Europe and the Middle East. Sony expects to ‘preserve’ its Latin American business and other Asia Pacific regions. 

Hopefully Sony can find some actual growth in those regions and do something with their mobile division. Maybe what Hiroki Totoki (pictured above), President and CEO of Sony Mobile, is doing is exactly the strategy they need to succeed – lemonade stands with Xperia products.

Discuss:

Where do you think Sony Mobile has the biggest opportunities to grow?

[Via XperiaBlog]

  • Ana Helušić

    Lol another great decision from Sony executives FTW

  • Talos the Robot

    Sony just wants to help Apple to grow more in those regions. I can’t find a better excuse.

  • hehe right? But the funny thing is that Sony doesn’t even compete with Apple but I think somehow in their mind, they feel that they are? Sony needs to realize that they’re competing against Samsung and Huawei etc.

  • Talos the Robot

    I don’t think they want that. Sony just wants to be a major OEM who sell parts to others and also keep some patents in mobile industry. I hope I am proven wrong thought and things change in the future.

  • dbjungle

    They should just follow the Motorola blueprint. Moto put less emphasis on software and more on hardware while releasing very compelling devices at a reasonable price.

  • I never understood why Android manufactures were so focused on tweaking the OS and spending unneeded R&D money. Save that money, focus on good hardware and apps which can also help lower the product cost or widen the margins.