Before I dive into this topic, we should get a few facts out of the way.
- Sony makes premium smartphones
- Those smartphones tend to be out of the reach for a majority of Android owners who typically spend no more than $200 on a phone
- Sony was late to the smartphone game
- Sony lacks retail and carrier partners
- Sony has also never been able to mount a marketing and go to market strategy for their mobile devices
- Sony accounts for around 1% of the mobile industry profits
- Sony ships less phones in a year, despite having more models available than Apple does in a quarter (Samsung is not a good example as their sales figures include very low-end handsets as well, a market that both Apple and Sony don’t operate in)
Those facts should serve as a backdrop to the following news when Sony CEO Kaz Hirai spoke with AFR:
A paradigm shift in how we communicate with each other occurs every 10 years or so, but if we don’t remain currently in the business then we don’t get to play or we don’t get to create the next paradigm shift of communication, we basically throw a towel in and lose all the relationships with our retailers and carriers around the world.
Sony President Kazuo Hirai conceded it is no longer looking to win the handset game, and has its eye on what comes next instead.
In some ways, the move makes sense. Sony is behind, and with each year that passes, no matter what they’ve tried, their sales have only decreased. Even an increase in sales would have to be by a magnitude of 10x for it to matter in the context of the greater market. As far as Kaz Hirai and Co. are concerned,
he expected his phone division to be commercially viable, its ongoing participation in the hotly contested, but slowing, market would continue regardless of its ability to take market share from Apple and Samsung.
So don’t expect Xperia phones to disappear tomorrow as Sony will likely continue to develop them. However, their goals are now more long term with the hope of keeping a relationship with consumers and retailers until the next shift comes. Problem is, that shift could come in two years or ten and until such time, their mobile presence will likely only erode more.
If there’s a silver lining for the company, it’s that Mobile is profitable, which ensures the development of new phones in the future. But what happens if the next “paradigm shift” hasn’t arrived and Mobile’s ever decreasing sales lead to a situation where overhead costs simply outweigh any return?
Kaz Hirai has mentioned on numerous occasions that they only plan on keeping divisions that are profitable, putting the strategy of keeping retailers at arm’s length in jeopardy and disappearing from the mobile conversation altogether. Of course you could argue that has already happened.