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    Sony working on new all-in-one smartphone, hopes to make a turnaround in mobile space

    Synopsis

    Sony aims to make an ultimate convergence device - with a Bravia display engine, Walkman technology, PSP gaming and Cybershot imaging.

    When Vivek’s, a popular electronic goods chain down south, took stock of its IT and telecom business last September, it consciously chose to keep Sony Ericsson phones out. At the time, the store felt retail support for the brand was insufficient, it was losing consumer mindspace, and when compared to competitors like Samsung, its launch schedule was downright sluggish.

    Around a couple of weeks ago, Vivek’s revisited its decision and decided to bring Sony back. What made the retailer change its mind? “Recently when we did our own research we found that stores similar to ours were selling 200-300 pieces of Sony,” says B S Vishal, AVP, IT and telecom,Vivek’s. Today, Vivek’s stocks not just Sony Mobile but has five people from the company stationed at the store, giving live demonstrations.

    It’s been quite a rollercoaster ride for Sony Mobile. For the first decade of the 2000s it was known as Sony Ericsson, a name that it discarded earlier this year as it integrated Sony Mobile with the rest of Sony India. The Ericsson suffix worked for the brand initially, since it had a solid equity in the mobile phone space. However, as smartphones started to gain in popularity, Sony Ericsson began to falter.

    In spite of the company getting out of feature phone space in 2009 to focus exclusively on smartphones and being among the first on the Android platform, it was never quite able to duplicate the success of some of its competitors. Even a high profile brand ambassador like Kareena Kapoor who was associated with the brand from March 2010 to April 2011 couldn’t raise its profile. By 2011, SonyEricsson was taking a long hard look at its portfolio — signing on a brand ambassador wasn’t a priority and it chose to not renew the contract with Kapoor.
    Sony’s decreased mind space in India was coinciding with its woes globally. The Japanese giant once famous for technological breakthroughs like the Walkman and the Trinitron TV hasn’t had a blockbuster in years. The inability to keep up with digitisation and the demands of Internetsavvy consumers — something its nimbler Asian rivals likeSamsung have done more effectively — is reflected in the sea of red ink on its bottom line.

    In India,the first and faintest glimmers of a turnaround — at least in the mobile space— have begun to appear. Over the last six months, in which it had five launches, Sony Mobile claims things are changing for the better. According to industry folk in the know, in the January to April 2012 period, it led certain segments within the Android based smartphone universe with a share of 50 per cent albeit in a narrow price bracket of Rs 15,000-20,000.
     


    P Balaji, MD, Sony Mobile, is pleased with the results but knows there is still a long way to go. “When we started the journey a year back, there were a number of areas to be fixed — distribution,customer pull, operator engagement, end-to-end customer management, a strongleadership and most important the product,” he says.

    Sony hired new heads for sales, operator alliances and product, content and services. Retailers like Vivek’s were won back by providing trained staff for product demonstrations, setting up kiosks and even giving the stores live mobile phones. “It was important that distributors saw us as a dependable company,” says Balaji. Sony mobile tied up with operators like Airtel, Aircel, Tata Docomo and Reliance to offer exclusive data plans for corporate customers. Offers comprised money-backpacks, free mobile TV and access to Sony’s cloud service called ‘Box’, with 50GB of free file sharing and storage.

    Sony also went back to the drawing board in terms of product. Struggling to slough off the tag of being ‘just another Android phone’, it now aims to make it an ultimate convergence device offering the best of Sony: a Bravia display engine, Walkman technology, PSP gaming and Cybershot imaging. Termed the ‘four-screen strategy,’ it appears in line with the thinking at Apple, which intends to focus on the iPhone rather than the iPod; and with Samsung which has stopped marketing its standalone portable music players in India.

    Where Sony has a bit of an advantage is in its vast library. While Nokia had to forge alliances for its Ovi music store from ground up — and has not able to make a success of it globally — Sony can bank on content from its music and entertainment divisions. Preloaded in the new phones are songs like Kolaveri Di and Chikni Chameli that are available to users even before they make it to physical CDs. Its content arm, Sony Entertainment Network (SEN), plans to offer movies, music and TV shows. Sony India is also working with a number of local service providers to create value-added services that are exclusive to Sony users.
    At the moment though, SEN is not available to the Indian market. Sony does foresee a time when content becomes not just a differentiator but part of its revenue stream and plans on offering a basic and premium service; free for the first month and paid for afterwards. All Sony’s saying about this for the moment is new content is likely to be more expensive than older releases.

    The phones have been given a marketing push via a number of below the line activities that span onground promos and social media as well as the global ‘Made of Imagination’ campaign. Prasun Kumar, marketing head, Sony Mobile, cites activities like a traffic signal road block at 50 locations across India on the day of launch; a radio road block in top five metros during prime time; and the largest phone installation in India at Select City Walk, Delhi.

    While the initial response from the market has been positive, the jury is out on whether Sony’s ambitious four screen strategy has legs. Says Naveen Mishra, lead telecom analyst, CMR India: “If you have at least Rs 20,000 as your average sales value per device, then the margins are good.” Sony phones are largely in that price range.
     


    However Mishra also points out that Sony’s success would depend a lot on how the competition behaves and how well Sony can combine its device and content offerings. Nabankur Gupta, founder CEO, Nobby Brand Architects, echoes Mishra’s words. “Focusing on smartphones is a good strategy because then you are no longer in the numbers game; and if you manage to create a right aura around the brand, every time a customer wants to upgrade, Sony will be the obvious choice,” he says.

    He is less convinced by Sony’s content and four-screen strategy being key differentiators: “Even the said technologies are losing out in the durables space,” says Gupta. Sony’s traditional strengths of quality and durability if extended to these devices could perhaps be a better play, he reckons. “To be successful in India, you need to do three things: establish a perception of innovation, (even if you are not necessarily innovative); balance the perception with a good portfolio of product, price and distribution ; and finally enter smaller markets because that is where the money is.”

    Urban and SEC A towns are a major part of Sony’s strategy and they will continue to have products in the Rs 8,000-10,000 price range, to appeal to new customers. With a distribution spread across 300 cities and towns, a large part of the Indian population could experience Sony Mobile.

    As part of integration with the parent company, Sony mobiles will also be sold through Sony World’s and Sony Centre’s besides the various multibrand outlets and traditional shops. However, the highly competitive nature of the Indian mobile market will require Sony to constantly tweak its pricing.

    As Gupta points out: “If Samsung can bring similar technology at Rs 5,000 lower, the market will shift.” Competitor Samsung’s agency is, quite naturally, not too impressed with Sony’s comeback strategy. Vivek Dutta, VP - planning, Cheil Worldwide says: “Bringing together technologies is not a new thing. What Sony is doing is not buzzy enough compared to say the 41-megapixel phone launched by Nokia.” Even as the bar on technology constantly gets raised, Sony is hoping its all-in-onephones become as ubiquitous in consumer’s pockets as the company’s all-in-one home entertainment devices did in their homes through the 1990s.
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    7 Comments on this Story

    Swarga3081 days ago
    I have Sony xperia U a new innovative product launched in 2012 by Sony. I am very satisfied with it. In my opinion there is big chance that sony can beat its compepitors with its "make.believe" ideas... best wishes for sony...
    null3082 days ago
    there are 2 Morales one can learn from this story: Nobody is too big to fail, once failed there is always a chance to come up. Brands like Sony are larger than life, my dad used it, I used and probably my kids will use. The form factor may change the intrinsic value of innovation and superior products stays in mind. it need to be reinforce by right action
    Mahesh Shetty3082 days ago
    A little late to come with regular stuff. Sony needs to do what it has done successfully in the past i.e come up with innovative solutions in the smartphone space to recapture the market. It has the brand appeal for the same.
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