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 products 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 2015. 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 chart, 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 phone 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.