Sony to focus on mid-range and high-end smartphones

Sony is doubling down on its high-end smartphone range in the Middle East and Africa in an attempt to cut the losses of its ailing mobile and tablets unit in the coming year.

Hiroki Totoki, the chief executive of the Sony’s mobile communications division, said the company would focus on high-end and mid-range smartphones such as the upcoming Xperia Z4 and M4 Aqua rather than the rapidly growing entry-level segment.

“Smartphones priced under US$100 are forecast to represent more than 50 per cent of the market up to 2018, but if you look at their value share it’s lower than 20 per cent,” he said.

“Our focus will be the mid-range or higher-end range, which consists of 50 per cent market share in terms of value. That’s where we want to do our business.”

Mr Totoki said that the company’s lower end ranges would not disappear anytime soon, but it would “streamline” its handset portfolio towards next year, giving no further details.

He declined to say when the Xperia Z4, due to launch this summer in Japan, would be available in the UAE and the wider Middle East.

Sony announced last month that it had sold 39.1 million units in the year to March, a figure that was unchanged compared with the previous year.

But while sales revenue increased 11 per cent year-on-year, its mobile communications reported a loss of ¥220.4 billion (Dh6.69bn), much of which was because of a one-off ¥176bn impairment of goodwill.

The company forecasts that mobile device sales will drop to 30 million in the twelve months to next March, but that a focus on higher-margin devices will trim its losses to about ¥39bn.

Sony said it achieved double-digit growth in Turkey, Egypt and South Africa last year.

However, the company’s share of the smartphone market across Middle East and Africa stood at just 1.8 per cent for the first quarter of the year, down from 2 per cent a year ago.

While Sony’s strategy to focus on high-end models makes sense in terms of profitability, the company will find it hard to increase market share against its rivals, said to Nabila Popal, IDC’s research manager in Dubai.

“Sony benefits from a small base of very brand-loyal consumers who resonate with the brand from its glory days in other consumer electronics, and who are willing to pay the high price for a Sony-branded smartphone,” she said.

“The majority of consumers would rather use that money buy a high-end Apple, Samsung, or even LG device.”

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