COMMENT: Sony Mobile A Serious Basket Case As Consumers Shun Xperia Smartphones
One has to seriously question why Sony is still in the mobile phone market, they are under water and sinking fast according to the latest IDC Mobile Research.
In the first quarter of 2015, shortly after John Fetherstone the former MD quit Sony Mobile Communications Australia to take on a senior role in Asia for Sony, the struggling Japanese brand had sales for the quarter of 62,000 units, this was not good, compared to the million plus sales for Apple 800,000+ sales for Samsung and the 150,000 units sold by Chinese brand Alcatel.
Fetherstone management from Asia, Sony smartphone sales have slumped to just 7,000 units this is despite the Japanese Company rolling out their all singing all dancing Xperia Z5, Xperia Z5 Compact and the bigger Xperia Z5 Premium in the last quarter of 2015.
All of these smartphone Sony models appear to have been shunned by consumers which are switching to Chinese brands such as Alcatel, who had sales of 126,500 units in Q1 2016, and Huawei with 57,000 units.
Even McKeon’s former employer ZTE had better sales than Sony managed to achieve. They racked up 42,000 ZTE branded units, they also manufactured the 108,000 house brand units sold by Telstra.
This time last year Sony was taking back faulty Xperia 3 smartphones in the hundreds according to retailers.
Carriers who ChannelNews has spoken to say that there is simply “no appetite” for a Sony branded smartphone.
“The brand is dead and so are their smartphones” a leading retailer said.
Back in 2015 ChannelNews was told by Senior Telstra management that “hundreds” of Sony Xperia smartphones had “gone dead” within days of the device being activated on the Telstra network.
We reported that up to 70% 0f Sony Xperia Z3 smartphones failed shortly after consumers purchased their new Sony smartphone.
Telstra management who spoke to ChannelNews at the time, on the basis that we did not reveal their identity, said that Sony were well aware of the issue as they had replaced the problem devices.
Sony who has a track record of trying to manipulate the media at the time refused to acknowledge the problem.
Initially ChannelNews spoke to Joshua Velling Account Director for Telstra at Sony Mobile Communications. He did not deny the failure. He said “I cannot make a comment on this issue, I have to pass you onto our PR Company Hausmann”.
A spokesperson for Hausmann said after contacting Sony, “Sony does not comment on rumours or speculation”.
The only problem was that the speculation proved to be accurate, with former Sony Mobile staff confirming that the problem had cost Sony Mobile in Australia, sales and tens of thousands in losses.
Parent Company Sony, who has a history of trying to protect their brand when challenged by media Companies such as 4Square Media has a chequered history.
In Australia the Company has been forced to downsize from palatial offices in North Ryde that the Company spent hundreds of thousands remodelling to a significantly smaller refurbished building in North Sydney.
A 12-month investigation of Sony Australia by the Australian Taxation Office resulted in the Company being hit $21M in penalties and $32M in back taxes, shortly after the assessment was delivered the Chief Financial Officer of the Company quit along with the CEO.
Sony also moved their accounting and back office operations to Asia.
The ATO investigation covered tax returns spanning several years, questions were also asked about the Companies management practises.
Sony initially paid $26.8M back to the ATO they eventually settled the issue with the ATO by paying an additional payment two years later.
Unlike most other consumer electronics brands Sony Australia has kept their senior executives away from being questioned about their performance in Australia.
Globally, Sony has been shopping their mobile division around for the past two years in an effort to attract a trade sale despite this sales effort, Sony has found no takers for the besieged division.
Their desperate attempt to reinvent themselves is occurring under the shadow of inconsistent sales performance and profitability, with Sony now seriously looking to exit the handset market entirely if it can’t prove financially sustainable.
In a last desperate roll of the dice the Company is having one last crack at trying to restructure their disparate handset lines under the Xperia X brand.
The new line-up will consist of the Xperia X Xperia X Performance, and Xperia XA.
Currently, Sony Mobile Australia offers devices in a range of sub-brands, including the flagship series, Xperia Z.
All of these brandings will apparently be retired and replaced with the Xperia X brand.
Along with presenting the Xperia X logo which will grace future packaging and marketing material, executives at a recent presentation in Asia were told that the “third stage” of their efforts to revitalise what appear to be a dead brand is going to be all about marketing Sony smartphones “More thoroughly into users’ lives, partially by employing a growing ecosystem of linked accessories like headsets and projectors”.
They were told that their two past failed marketing exercises were all about by integrating deeper web connectivity and incorporating Sony’s strengths into handset functionality, respectively.
Sony Mobile bought out Ericsson’s ownership stake in the former Sony Ericsson in 2012, this also appears to have been a massive failure with the Sony marketing machine failing to grow their Smartphone brand despite appearances in the latest James movie and a host of other Sony produced movies and TV series.
In Australia even house brand smartphones sold via Aldi are outselling Sony smartphones.