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Sony’s plan to sell only premium Xperia handsets in India was a long time coming

Sony India has taken a call to only sell its premium Xperia smartphones in India and get out of the entry to mid-range segment. Speaking to the Times of India, Vijay Singh Jaiswal, head of Xperia business of Sony India said that Sony India s marketing strategy will focus on offering premium products1 in the smartphone segment. The Japanese phone maker will only be looking at launching its flagship Xperia products for the Indian market. According to the report, Sony will also use the upcoming festive season to offer special offers on its handsets.

About time for Sony

This move was long time coming, and it is not remotely surprising.

In the chart above which shows worldwide sales in Q1 2016, there are three Chinese players after Apple and Samsung, while Sony figures in the Others category.

Sony didn t have a choice. This is a global decision and it is not just India, but Sony is also retracting from other growing markets such as Brazil, China, Russia as far as non-premium phones are concerned. It will be refocussing on profitable markets including Europe and Japan, which is a key market for Sony where it is quite relevant as a brand, said Anshul Gupta, research director at Gartner.

Sony Mobiles just has around 1.5 percent market share in India. According to IDC, Sony s share fell from 3.5 percent in 2014 to 1.4 percent in 20152. This year, in India, around 24.4 million smartphone units were shipped in Q1 2016, which is a 12 percent year on year growth. Among the top five players were: Samsung, Micromax, Intex, Lenovo and Lava. Sony was a company which along with Microsoft, BlackBerry and LG registered the biggest drop in terms of sales. The sub Rs 20,000 market is flooded with players from China such as Xiaomi, Lenovo, LeEco, Meizu and so on, who are outdoing each other in terms of value propositions on offer.

Sony hasn t really released many phones in this segment over the last year, and even if it did, they would certainly not compete with the Chinese handset juggernaut that has taken over the Indian market.

Sony s dropping market share

One look at this chart3, and you notice that Sony had a 5+ percent market share only till Q2 2013, post which Sony has never reached that number. Interestingly, that is also the time when Xiaomi entered the India market and heralded the entry of the Chinese smartphone players, who really have captured the sub Rs 20,000 market. On the other hand you have Indian players such as Micromax and Intex which are doing well numbers wise. All this points to a simple fact that the sub Rs 20,000 market is, for all practical purposes, a no-go zone for Sony. Take for instance its latest phone under Rs 20,000 the Sony Xperia XA. It has specifications which can easily be outclassed by a Rs 15,000 phone from a lot of the Chinese smartphone makers. Yet another example is the Xperia X, which although priced at Rs 48,990 offers chipset and RAM which is also found on some sub-Rs 15,000 phones.

One area where Sony does excel is in its high end phone segment. Sony flagships have been consistently good performers, although the Z3/Z3+/Z5 were marred by a lot of heating issues. That aside, in terms of build quality, water and dust resistance, battery performance, camera quality, Sony flagships can definitely hold their own against say a Samsung or an Apple flagship. The fact that it is not selling huge volumes of these well made devices is definitely a matter of concern. According to Gupta, if Sony mobile has to survive not just in India but globally, then it has to come up with products which will rival the Samsung Galaxies and Apple iPhones.

Where has the Sony of yesteryears gone?

The first smartphone I had purchased was a Sony Ericsson W330i. This flip-phone from the erstwhile Sony-Ericsson s Walkman series had a lovely design which made it stand out from the other candy-bar and flip-phone form factor smartphones back then. Even the in-ear headset along with the phone had its own appeal. Sony-Ericsson made phones which had really good aesthetic appeal and the phones looked visually different with their own design philosophies. Sony has traditionally been known for its design prowess, across technology segments.

Sony, like Nokia, was also known not just for its appealing handsets but also a surety that this was one of the best aspirational brands out there. Sony is still a trusted brand. But in the mobile space, cut to the Sony Xperia Z series phones, and there s really nothing much visually that demarcates the Z3 from say a Z5. It feels as if the design department at Sony just decided to play it safe with the form factor and not really experiment much. The mid-range phones from Sony don t look much different either, but they still command the same premium because it s just Sony. Is it really a surprise to understand why Sony lost its mojo in this agile smartphone market?

But all is not lost. According to Gupta, Motorola had done a similar reorganisation and restructuring of its company to an extent where they retracted from many markets. They weren t selling Motorola phones in India for a while. But then they came back with the Moto G, Moto E series, focussing only on the online market and it has been doing well.

Sony is strategising in a similar way, focussing on the profitable markets for now, he said.

Whether that strategy will pay off, only time will tell.

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Sony planning a shift in India strategy, to sell only ‘premium’ smartphones

NEW DELHI: Sony India is all set to change its India strategy. The company has confirmed to TOI Tech that it would only sell ‘premium’ Xperia smartphones in India. “Sony Mobile drove transformation in FY15 towards a profitable and sustainable company globally including the areas mentioned. As part of our transformation, we are sharpening our focus on select products and sales channels,” said Vijay Singh Jaswal, head of Xperia business, Sony India.

“Considering the recent shift, our marketing strategy will now revolve around offering premium products in the smartphone segment,” he added. Despite the not-so-rosy situation globally, Jaswal says that because of Sony’s premium strategy in India, the average selling price has soared by 55% in Q1 of FY 16 as compared to the same period last year.

Supporting the company’s strategy of selling premium products in India, Jaswal adds that “Going forward we Sony aim to launch flagship products for our customers in India which will further enhance our presence in the market.” The company plans to make use of the upcoming festive season to offer its products at special offers.

Though the Japanese tech giant did not confirm this, but the move could very well be related to earlier reports suggesting that Sony plans to ‘defocus’ on India4 along with some other regions and will only sell premium devices to ensure better profitability. The announcement was said to come because of the low 0.3% CAGR smartphone growth prediction in Indian, Chinese, Brazilian and Indonesian markets in FY 16-17. Sony also reportedly said its global average annual growth dropped by 1.4% and the growth in India, Brazil, China and Indonesia slowed to 0.3%.

Sony has tried almost every strategy it could in the past few years to stay ahead in the oversaturated smartphone market. The firm previously shifted its strategy of launching handsets once in a year to once in six months. Few months back it confirmed that the Xperia Z5 handsets are the last in the ‘Xperia Z’ series and that Sony will be diverting its attention towards the new Xperia X series moving forward. “The Xperia Z line has reached its culmination – Xperia X series represents a new chapter and evolution of our product strategy. Whilst the Xperia Z series was all about bringing the best of Sony’s advanced technologies to smartphones, Xperia X series is based on bringing smart, adaptive Sony user experiences across camera, battery performance and hardware/software design,” said Sony in an official blog post. Since Sony India claims to be focusing on offering premium handsets, it can be derived that Xperia M or Xperia E series of handsets may not launch in the country in future.

It will be interesting to see how Sony plans to sustain or grow with such a niche product offering in India.

According to the latest IDC report, Sony has been struggling in the smartphone market lately.

The top 5 spots have been captured by Samsung, Apple, Huawei, Oppo and Xiaomi.12356


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Sony to ‘defocus’ on India citing growth slowdown

Sony mobile has announced that it would be defocusing on markets such as India, China, Brazil, and the US where it has not succeeded in making a considerable impact in the past few years. At a recent investor day event which took place in Tokyo, the company announced their plans for the aforementioned reasons, citing a downward slide in its smartphone business in these regions. The news was brought to light after Xperia Blog, an unofficial website dedicated to Sony s products, got access to the details discussed at the investor day meet.

It was also mentioned that Sony expects its smartphone business to only grow 0.3 per cent in these markets, which is not at all satisfactory, given the effort put behind churning out a good product. To put matters to perspective, Sony s estimate last year was over 8.1per cent; however, the outcomes have changed drastically. The company also gave insights on its regional strategy, pointing out that it will only focus on regions which are expected to flourish such as East Asia including Japan, Europe and the Middle East. Apart from that, the manufacturers of the once popular Xperia series also said that it would also preserve its businesses in Latin America and other Asia Pacific regions.

Intrusion of cheap, affordable devices

Another reason the company is shying away from the Indian market can be attributed to the uncountable number of new Chinese manufacturers that are producing affordable, premium-like devices. The mid-tier smartphone market in India has now become a battleground and the competition is relentless. Now smartphone manufactures are coming up with new technologies both software and hardware to keep the people engaged. The moment a company decided to take off the foot from the pedal, another manufacturer will be looking to take advantage of the ignorance.

In such a scenario, the handset market in India has become really volatile, where no one can be crowned the king of the pack.

Besides, Sony has a lot of other business which make money for them and its not like they would be completely eliminating their presence; it will just withdraw some of its future handsets.