Why did Sony's smartphones lose their popularity?

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The latest subject of our mobile market examination is none other than Sony. Like LG, Sony still has a strong lineup of smartphones despite its woes, but it seems the new releases are only in the public’s eye for a short while before people start looking towards other phones they might actually get. But why’s that?

The pride of the global brand

Sony is no stranger to success in the cell phone market. During the '00s, a number of well-received handsets were launched under the Sony Ericcson brand, including many models praised for their music playback and camera capabilities. As much as 9% of the global cell phone market was owned by the Sony Ericcson joint venture in 2007. Riding on the popularity of its successful "dumb" phones, Sony Ericsson entered the Android world in 2010 and launched several notable models, such as the Xperia X10 and Xperia Arc.

In 2011, Sony acquired Ericsson's stake in the joint venture. As a result, the division now known as Sony Mobile got full access to the parent company's technology and R&D. How much that helped is hard to determine, but Sony managed to reach close to 5% global smartphone market share at its peak in 2013 and was aiming to become the third biggest manufacturer in 2014. Instead, the company began sliding down the charts.

One of the major reasons Sony’s smartphones weren’t successful in the years that followed was the company’s overall strategy for the mobile market. Sony, being a technology giant, wanted to become the "Apple" of Android by offering premium phones only. In 2012, Sony Mobile's CEO said "That is where the value is, that is where the money is", referring to the top segment, and adding that the goal was to "play to our strengths - the premium brand that Sony stands for". However, Apple’s appeal to consumers was not easily replicable and the Android market, at least in its early years, was demographically very different from that of the iPhone.

It turns out, Android users had a wide variety of smartphones to choose from, and premium prices had to be backed up by significant hardware features or consumers would just get something cheaper that offered pretty much the same experience.

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One thing that put Sony at a great disadvantage on the US market was its shoddy relationship with mobile carriers. Exactly what transpired between executives on both sides will likely remain a secret, but it probably had to do with Sony refusing to make adjustments to its phones that carriers demanded. Then there’s also revenue sharing involved when selling through a carrier, which might have been another point of disagreement between the parties.

Either way, it didn’t take long before Sony stopped selling its smartphones through carriers, which meant a significant drop in shipments and also lack of brand exposure to potential customers. That move had another negative consequence for Sony. For years, the company had to either disable the fingerprint sensors on its smartphones or remove them altogether for the US market. The reason for that was never clearly stated, but it was linked to a deal Sony made with one of the US carriers that had a clause about the sensors in it.

To top it off, Sony is still refusing to change the pricing of its phones, keeping it a tad higher than that of other similarly specced devices. Now, we understand that if you want to be a premium brand, you have to have the premium price to match (again, Apple). But when that strategy does not work for your company a few years in a row, you don’t have to be a marketing guru to realize something needs change. It appears that Sony would rather take the hit from slow sales than offer its flagships for prices lower than those of competitors.

Design that makes you yawn

Beyond the carrier issues in the States, Sony mobile didn't seem to have a competent global strategy either. The company didn’t really do much to differentiate its lineup from those of its competitors. With its earlier Android models, still under the Sony Ericsson brand, the company often experimented with different designs and shapes for its phones. However, once the name "Ericsson" was dropped, Sony apparently decided it only wants to have serious-looking phones best fit for businessmen, which often meant boring ones. It kept offering almost identical-looking smartphones with an equally identical software experience year after year, giving the impression that the responsible executives had turned on cruise control and called it a day(year).

To be fair, Sony did have a few attempts at innovation, the most notable of which is the Sony Tablet P. The dual-display phone-tablet hybrid probably looks familiar to you now, when companies left and right are working on foldable and dual-display smartphones, but it was released in 2011! The technology back then wasn't good enough to make such a device useful, however, so it remained as more of a showpiece. 

Failing to take advantage of its heritage

What’s more puzzling about Sony’s approach is that the company is actually a big contributor to the advancement of smartphone cameras. Its sensors can be found in most modern smartphones, including the iPhone XS Max.

But for a long while, Sony played the megapixel game, sticking 23MP sensors into its phones, while competitors relied on 12MP sensors. One might assume that Sony would have the advantage here, but in reality, lower-resolution sensors on phones are generally less susceptible to digital noise, allowing them to produce clearer photos despite the lower pixel count. The fact that Sony did not use OIS in its cameras didn't help either. The company also ignored dual-camera setups for too long, betting instead on less useful features like 960 fps video recording. 

To make matters worse, Sony has been slow to adapt to the market trends, its first flagship with OLED display came out last year. 2018 was also when it finally ditched the design with enormous top and bottom bezels it became known for (not in a good way). However, it was quick to follow with the removal of the headphone jack, straying away from the music enthusiasts as well, a demographic it used to cater to in the past.

Beyond the criticism Sony often receives for the lack of innovation, its smartphones never got much negative press, as it was the case with LG, and offered decent performance to those that remained loyal to the brand and there aren’t many of them left.

Sony’s smartphone sales have shrunk so much, the company expected to ship around 7 million devices globally in 2018. To give you some perspective, that’s roughly as many as any of the top 3 manufacturers sell in about 2 weeks.

At this point, Sony’s smartphone business is on life support provided by the company’s other successful ventures. It almost seems like Sony refuses to pull the plug on the Xperia line out of sheer pride and stubbornness to have smartphones in its portfolio at any cost (similar to what LG is doing). At the rate its sales are going down, however, by this time next year Sony phones will be rarer than a red panda.

What can other companies learn from the fate of these three manufacturers?

A common theme between all three cases is that users’ trust is hard to gain and easy to lose, who would have thought, right? If anything, what happened to LG, HTC and Sony should be a warning for the current top manufacturers that they’re walking on thin ice, with plenty of sharks waiting under it to grab a hold of that sweet market share.

We certainly hope that more phone makers will remain relevant on the market. Competition, after all, is ultimately beneficial for us, the consumers. But maybe one or two victims of bad business decisions won’t be bad either, reminding companies of their “mortality”. Who’ll become the sacrificial lamb, however? Maybe 2019 will show us.

If you've missed the previous articles from this mini-series, you can find the links below:

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