Sony to discontinue ‘Premium Standard’ phones, Xperia X and Xperia X Compact were spectacular failures

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Stop me if you’ve heard this before but Sony Mobile is once again shifting its strategy. Just a few years back, the company had an ambitious goal of becoming the world’s third largest smartphone maker, leaving only Apple and Samsung ahead of them. With that plan not working, Sony announced a major shift in July 2016 which would see them defocus on India, USA, China, and Brazil.

That of course didn’t quite work for them either, with sales declining dramatically, so Sony is once again going target more emerging markets with the likes of the Xperia L1, a budget smartphone. Ultimately, the plan is to leverage the brand in Japan, East Asia, APAC, the Middle East, and Europe with the hopes of differentiating their phones

 with technologies that only Sony can deliver, 

whatever that means. So the plan is to have more moderately priced phones to increase sales then, right? That’s why the Xperia L1 exists? Nope. Sony is also killing their mid-tier premium phones, which are not to be confused with mid-tier phones.

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According to Sony, the Xperia X and Xperia X Compact are considered ‘Premium Standard’ phones and both were spectacular failures. In Japan, the phones delivered a respectable 85% of their intended volume targets for the year, though Sony is mum on what exactly the sales target was. For context, Sony Mobile managed to only sell shy of 15 million units in 2016 so that number wasn’t likely all that high.

As for the two phones’ performances outside of Japan, they managed to pull in only 31% of their intended sales volume. For what it’s worth, the chart below does look a lot more manageable but that doesn’t mean anything if there isn’t a solid plan behind it.

Sony_IR_Day_2017_1

 

Look no further than Apple who only offers premium phones and Samsung who offers a phone at just about each price – wildly different business plans, but each is suited for the company. The problem Sony Mobile faces is that they haven’t figured out who they are. What does the Xperia brand, and the phones they sell, stand for? What’s unique about them and who is their target audience? And once that’s figured out, what does Sony need to do to grab the attention of that audience and get them to consider the XZ Premium over the Galaxy S8?

For 2017, the Sony Mobile plan stands as such:

  •  Adjust our product portfolio to recover lost market share in FY2016
  •  Differentiate products with technologies that only Sony can deliver
  •  Improve sales operations
  •  Further focus on markets where we can leverage our strengths

As for 2018 and yes, to the surprise of most readers, there exists a plan beyond this year:

  • Continuously enhance smartphone product competiveness (their typo)
  •  Create new communication devices and services
  •  Stabilize business portfolio by growing recurring revenue businesses

I of course don’t expect Sony to outline what future products they plan on releasing but the above bullet points give me little reason to believe they understand the challenges they face. Once Sony can figure out the questions I asked, only then can they create products that cater to those audiences. Until then, Sony is simply releasing products into a market that’s not even considering their brand when it comes time to shop.

Now, a moment of silence for the Xperia X Compact and any hopes of an Xperia XZ Compact. That is, until 2018, when we’ll likely hear about a shift in strategy again.