As LG shut down its smartphone business, Sony returned to profit. Maybe there is room for niche smartphones to succeed?
Sony did something LG couldn’t do… make me believe again
The history of the smartphone industry is one of upheaval. As Chinese brands have grown and benefited, many traditional phone and tech brands have struggled. Blackberry, HTC and Nokia (without the “resurgence” of HMDs) have gone by the wayside. LG was the latest and biggest victim of the highly competitive market and withdrew after repeatedly trying and failing to relaunch its product line.
Sony seems to be the exception to this rather unfortunate trend. While the brand image that gave us the mighty Sony Ericsson W800 has been at the bottom of the market share rankings for several years, it is still beating nearly two decades later. The business is on an uptrend at a time when others are going bankrupt.
Contrary to the pace of the game, Sony’s wireless division made its first profit in five years in the first quarter of 2021, accomplishing this feat by lowering production costs and increasing the average retail price of its phones. A proud price of $ 1,299 for its new flagship, the Xperia 1 III. For Sony, however, the picture is not entirely rosy. The company sells fewer smartphones than ever in the past decade. Only 2.9 million units by 2020 against a peak of 39.1 million in 2014, but commercially Sony is still alive and well despite all the obstacles.
Niche attractiveness versus mass market
The comparison between LG and Sony is interesting. These are two big tech brands that, after initial successes in the cellphone market, have invested countless sums of money in their struggling cellular businesses over the past decade. LG finally announced it the same year, Sony finally made a profit again.
The main difference I can see is that LG has never really established itself in a target market and has released a wide range of different phones, some of which have been very experimental to achieve great success. With phones ranging from the extremely experimental LG G5 and Wing to the incredibly secure but oddly named G7 ThinQ and modern Velvet, it has become increasingly difficult to identify who would actually buy LG phones year after year.
Meanwhile, Sony has looked inside, asserting its roots and striving to appeal to its target audience with little thought to build a revolutionary smartphone. Sony figured out what it could be good at instead of completely reinventing itself. Fortunately, the excellent V-series has almost found a similar multimedia niche as Sony’s currently, but LG’s phones never quite hit the extremely high price tag of the Sony Xperia line.
Sony faced similar problems as LG’s in the mid to late 2010s, with both sales and market share declining. The Xperia Z and XZ ranges launched with a messy six-monthly release schedule. There was also a bewildering variety of models with very little innovation in between. As you can imagine, the phones received mixed reviews, although Sony received praise for their excellent audio performance and IP ratings.
The Xperia line has turned the page with the new Xperia 1 series, which focused on resolving previous reviews without straying too far from Sony’s mainstream audience. The first-generation model is even praised for its excellent hardware, even though it was very expensive and imperfect. It’s here that Sony first unveiled its 21: 9 4K HDR OLED display, triple camera setup, and finally brought back the headphone jack (and expandable storage) to raise its hand as the ultimate media machine.
Believe in the power of the doghouse
It took a test or two, but the cheaper Sony Xperia 1 and Xperia 5 flagship smartphones have been tested quite well. In fact, their 2020 models were some of our top picks for the year. And the 2021 flagship, the Xperia 1 III, is the brand’s best performance yet, albeit at an even higher price tag. Sony’s formula works (finally).
Sony’s own numbers show it doesn’t make phones for mass market customers, but earnings performance suggests it doesn’t have to. Using its best Bravia display, alpha camera and audio technologies, Sony has proven that it is possible to compete in the fiercely competitive smartphone market by playing with an enthusiastic audience.