Sony May Stop Producing Budget Phones

Sony

Sony is stepping up its smartphone strategy, having taken a distant third place to Samsung and Apple in overall sales during 2012. Each device that the Japanese manufacturer produces ups its game a little, with specs increasing at a steady but impressive rate.

However, setting its sights on the highest end of the smartphone market could involve a dramatic shift in the company’s strategy which may see it move away from the budget handset arena altogether.

Stephen Sneeden, Sony’s Xperia product manager, recently spoke to tech site CNET about his firm’s future: “We’re ready to be a premium smartphone provider, logically then, at the very entry level is where you lose the ‘Sonyness’ he said.

“It’s where you cannot implement some of these wonderful things from Sony at such a low cost, we might leave the very entry tier to some other manufacturers.”

Going on to hint at what sort of devices may emerge from Sony in the future, Sneeden said: “Mid- to premium-tier is the more likely scenario.”

The firm’s latest flagship, the newly unveiled Xperia Z, is certainly a premium device. With a quad-core, 1.5GHz processor and Android Jelly Bean  operating system the device can rival the best handsets on the market, but what really sets it apart is its fantastic, 5-inch full HD display.

However, Sony hasn’t always put such a focus on leading, high-spec features. During its ten year partnership with Ericsson the firm produced many popular budget handsets such as the T100, which proved popular with the public.

But since the advent of the smartphone age there is an even greater emphasis in being seen as ‘premium’, with manufacturers eager to associate themselves with the high-end of the market.

Sony Yuga Front Top

Apple has managed this very well; since its range does not include anything that could be considered a budget or even mid-range device upon launch the brand has developed an association with the more expensive end of the market. Could it be that Sony and other manufacturers may try to ape this business model and move away from the world of budget phones?

While this notion is certainly plausible there is one problem with it; several of the world’s largest manufacturers make a huge amount of money from budget smartphones and feature phones.

For example, in Q3 of 2012 Nokia is reported to have sold 2.9 million Lumia devices, the firm’s leading range which runs the Windows Phone operating system. Yet in the same timeframe the Finnish manufacturer sold 77 million feature phones, including its System 40 powered Asha handsets.

However, this disparity in sales between different kinds of phones may not continue. Feature phone sales peaked in the last quarter of 2010 and have been in decline ever since, with a 20% year on year fall. Smartphones now outsell feature phones in many markets including Western Europe, North America and Japan.

With sales of feature phones tailing off, could more manufacturers make the same move that Sony appears to be making and leave the lower end of the market altogether?

After all, while Nokia is still clearly doing much of its business in the feature phone market it has been making rapid advances with its high-end handsets of late.

Lumia 620

Following the revamp of Windows Phone the Finnish firm has created the excellent Lumia 920 flagship, along with the mid-range Lumia 820. Both of these handsets feature high-spec features such as multi-core processors and high-resolution displays while the Lumia 920 goes as far as having 4G LTE connectivity.

A new focus on high-performance cameras has also emerged from Nokia, with its PureView technology first seen on the 41-megapixel 808 Pureview before making its way to the Lumia 920.

However, the firm does not appear to be making a change of strategy as drastic as that hinted at by Sony, with Nokia having recently launched cheaper handsets such as the Lumia 620 and Lumia 710.

Meanwhile, Samsung has enjoyed incredible success with its high-end handsets of late, with the Galaxy S III selling over 30 million units by the end of 2012. But the Korean manufacturer has recently announced that it will soon launch devices running the Tizen platform, likely to be aimed at the lower end of the market.

Having taken the title of world’s biggest mobile phone manufacturer away from Nokia last year, Samsung may well continue to produce a wide range of devices across the market. However, there has been speculation that Tizen will be developed and could eventually become the firm’s high-end platform of choice in the future.

While Stephen Sneeden’s announcement that Sony could be moving away from cut-price phones may sound drastic it could well be indicative of a wider trend in the industry. With feature phone sales falling and smartphones becoming more and more popular, there may come a time when what we see as high-end nowadays will be commonplace.

Many manufacturers would doubtless love to have the sheen of high-end exclusivity bestowed upon their products, and while Sony may be leading the charge in this direction it is not impossible that other manufacturers may begin to follow suit.

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