Sony to ‘Defocus’ India: Another Mistake?
In a recent investors meet, Sony Mobiles announced that it would be defocusing from certain markets including India, USA, China and Brazil.
“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,” Xperia Blog added in its report.
Sony, a company that has long been a sparkling diamond in the electronics industry has been facing a lot of challenges with it’s Mobile Division. Xperia, the lineup under which Sony has been selling it’s smart devices has long lost the flagship battle against the Galaxy. Adding to it’s plight, even low and mid tier segments have been facing stiff competition from local brands like Micromax, Karbonn and Chinese brands like Xiaomi, Lenovo and Oppo.
How did a lineup backed by a giant follow this fate?
Xperia devices were highly praised when the Z1 and Z2 were launched. They had carried a Unique Selling Point, like waterproofing, a very unique design, Sony Clear Audio and offered a lag free experience while Samsung’s TouchWiz was a joke. In fact, even the mid range devices were booming like the Xperia M, Xperia L, Xperia C and sub variants of the flagship like Xperia XL and XR which offered the user a huge array of choice to choose from.
But then, by the time the Z3 and Z4 were launched, the competition has intensified severely. HTC One M8 had been a clear winner followed by Samsung’s Note 4 and LG’s G4. In 2016, Samsung took back the reign with the S7. In the past 2 years, Sony was clearly knocked out, it just couldn’t buckle up.
Sony had also followed the format of releasing a ‘flagship’ device twice a year. Even Samsung has followed the same strategy, but with Sony, the new product was directly competing with the past one. While in Samsung’s case, the S series and Note series had a lot of differences, which didn’t damage the predecessors sale. So, the Z1 was sitting a top the Z just within 6 months, while the S4 sales were unharmed because the Note 3 was a different lineup. So, even though I spent a huge amount of money on a Z, it was bound to be outdated merely within 6 months of launch.
In 2013, Sony was doing great in both, the mid range as well as the high end segment. After the success of the Z Series, it shifted most of it’s attention to the high end, completely neglecting the mid and low end. Sadly, by the end of 2014, Sony had lost both the turfs. The low end range was quickly lost to the new comers like Xiaomi, Lenovo, Motorola and Oppo. Today, only the new announced X series is selling online at Flipkart.
So, what now? Is defocusing the chief markets going to work?
I don’t think so. Defocusing countries like India almost means giving up. Why do I say this? Because even though the low end segment is gone to the Chinese brands, the mid and high end segments still has a lot of demand for premium handsets. And…. the best thing to do right now for Sony is, to enter the competitive zone.
They should continue selling the flagships at the premium price, while simultaneously enter the low end segment. Samsung has still managed to stay a putt with the J and On Series, without giving up on the premium. Sony can still charge the ‘premium’ price because of it’s brand value and huge infrastructure chain present in the country.
Chinese OEM’s are struggling right now when it comes to After Sales Support, Offline Distribution Network and most importantly Brand Value. Sony Xperia, has all these on ground. Leveraging these will give them a huge bonus over the counterparts, be able to charge a little premium in the price sensitive segment and slowly spring back sales.
Above all, I don’t see the demand for these smartphones droping anytime soon in India. In fact, Companies like Vivo, Xiaomi, Lenovo, LeEco and Gionee have been able to make a mark. If they can, Sony definitely can!