Everybody chasing the mass market - low-end and mid-range handsets - is skimming a living. Even when you're selling tens of millions of devices profits are low because margins are razor thin. The high-end market is quite different.
If they can make products that appeal they'll do well there. Samsung have lost a fair bit of the high-end market because their handsets are not premium. Specs are good, materials and design are not. I'm not saying Sony should aim to be the Vertu of the Android market but they could be the Apple of the Android market.
If you make an Android phone you have no choice but to chase the low to mid range. Noone but Samsung (and to a much lesser extent Lenovo) is making any serious money at the high end for Android. And even Samsung is starting to see reduced profit in the high end. That's because the market for Android phones is shifting to the low-mid range.
Apple sells well in the high end still because there are NO options for a low end iOS device. If you want an Apple branded iOS device, you have to pony up the cash for it.
Android never had a chance at dominating the high ASP market. Similar to how Windows never had a chance of dominating the high ASP market (for all Windows devices) compared to MacOS/OSX. Once you allow 3rd parties to sell devices running the same OS, you have a situation where 3rd parties will release devices that are just "good enough" for the vast majority of people. And devices that are "good enough" for the masses will never be highly priced models. And because of that you will dominate the overall market, but your ASP will never be as high as the competitor that focuses on only selling high priced models. See Window's domination of the PC market versus MacOS/OSX, see Android's domination of the Smartphone market over iOS. iOS share of the smartphone market will continue to shrink (volume may remain high) while Android's will continue to expand because of this.
Google could have gone with the Apple model for selling smartphones. But then they never would have had a chance against iOS. And had they somehow managed to be successful, Androids marketshare at best would now be similar to iOS and not the current Android market share. There's a limited number of people on the planet willing to buy high end devices. If you then somehow opened that up to 3rd party sellers, each manufacturer would have an increasingly smaller slice of the high end smartphone pie.
Sony's problem is that they never established themselves as a serious competitor to Samsung at the high end. They were too late and their handsets originally weren't as good. If we use a PC analogy. Sony is to Samsung in the smartphone arena as Gateway is to Dell in the PC arena. None of those companies can easily compete with low cost Chinese manufacturers. They need mid-range and high-end sales to sustain their business. Samsung and Dell can get those sales due to a combination of inertia (got in there early enough with good enough quality), reputation, investment, etc. Sony and Gateway (before its demise, it's just a shell brand now) cannot. You can argue all you want that Sony "could", but the market has shown that it doesn't really care enough to sustain them. Similar to Gateway (and many other once prominent PC brands).
Sony will attempt to hold onto their smartphone division, but there is nothing they can do to keep it.
Let's put this another way. Sony is abandoning the low end market. Slowly withdrawing from the mid-range market. And very slowly reducing their presence in the high end as they attempt to bring the division to profitability. And doing that they suffered even more massive losses that were far greater than their projections. Leading to them having to revise their financial forecast for the company yet again, and not in a positive direction. Compare that to Microsoft who are completely focused on growing their brand. How? By focusing on the low end. Slowly growing the mid-range. And occasionally releasing a high-end smartphone. End result, while new, their phone division is making a profit. And while they aren't an Android phone maker competing against other Android handset makers, they are still in competition again Android handset makers. Their one benefit, which also happens to be a detriment, is that they offer an alternative phone OS and experience.
Chasing the high-end at the expense of the low end is going to get you nowhere in a maturing smartphone market. As I've stated before, the smartphone market is close to reaching a similar point as the PC market. The high end has been mostly exploited (similar to PC in the late 90's early 2000's), and most of the growth is going to be in the low end with some in the mid-range (similar to PC in the 2000's). With its explosive growth, its timeline is greatly compressed compared to the PC market, but it is following a similar trajectory. And it's only a matter of time before it reaches a similar market saturation as the PC.
In other words. It's the wrong time to attempt to focus on only the high end. And an extremely hard sell to focus on the low end with other basically similar Android low end handsets (much like the PC market during the 2000's when you saw numerous established PC players exit the market only to see the rise of players focused on the low end, like Asus, Acer, etc.). Or, like TVs.
Regards,
SB
