A Right Decision for Sony Withdrawing Low-end Smartphone Market?

It is reported that Sony will withdraw from low-end or entry-level smartphone market, focusing more on high-end samrtphone market, said Sony Xperia product manager in a recent interviewee.

Currently, only emphasizing the high-end smartphone market can benefit the beleaguered Sony from decentralization of funds and from avoiding the possible problems that is facing HTC which introduces a variety of products, resulting in no flagship machine.

But from the development trend of current smartphone perspective, this decision of Sony seems wrong and dangerous. According to market research firm IHS, the low end represents the fastest growing segment of the global smart-phone market, with shipments growing from 206 million to 559 million from 2012 to 2016 with a 51% compound annual growth rate (CAGR) from 2011 to 2016, compared to the 12% CAGR expected for high-end smart phones during the same period. IHS expects emerging regions where low-end smart phones have the most appeal to generate the fastest growth among all regions for mobile handsets.

In addition, the shipments of smartphone in China and other emerging regions show the strong attractiveness of mid and low-end smartphones; Intel even declared to march into this segment, therefore withdrawing from this promising field for Sony will undoubtedly lose market shares. From some sense, China market decides the success or failure of handset manufacturers, and mid and low-end smartphone is the mainstream product in China, especially when global economic situation continue to show uncertainty. As a result, consumer’s spending poses requirements for paying more attention to low-end market.

In terms of high-end smartphone market, it is almost dominated by Samsung and Apple, so to seize more market shares from these two smartphone giants is difficult for Sony. In 2012, Samsung outpaced Nokia and ranked the first among the smartphone manufactures where the layout in various-level market contributes a lot to its achievement. Facing so strong competitor, a good achievement and large market shares seems possible. In addition, based on recent signs, Apple is projected to come in at middle and low-end smartphone market, so for Sony having forayed into low-end market, forgoing this segment is really right for Sony?