Back in February, I chastised BlackBerry for its decision not to release its latest BB10 smartphones in Japan.
We all know how that turned out, but now, the opposite is ironically happening with Sony (SONY -0.33%). According to a recent Reuters report, Sony CEO Kazuo Hirai just admitted that, for now, his company has no significant plans to try and compete in the world's two largest smartphone markets -- China and the U.S.
Instead, Hirai stated, Sony will focus on "putting substantial resources" into gaining ground in Europe and its home market in Japan.
Image source: Sony.
Now, I'll admit that BlackBerry had to pick its battles, especially considering its position in the nation of more than 127 million potential customers was historically weak.
Remember, a comScore report published only a few months earlier pointed out that smartphones powered by Google's Android OS -- a list which notably includes devices from both Samsung and Sony -- held a strong lead in Japan, making up a whopping 64.1% of all smartphones shipped in the country. In the meantime, Apple's (AAPL 0.52%) iOS commanded a solid second place, with a 32.3% share.
Though it may be a hard pill to swallow for Sony investors, there are a number of reasons Sony's move makes sense. First, for those of you keeping track, it's fairly obvious that Sony is essentially a non-player here in the U.S., as its Xperia smartphones are only offered by the fourth-largest carrier, T-Mobile.
What's more, the Japanese company has had difficulty gaining ground in China, where smartphone stalwart Samsung has been more than willing to target lower price points. In addition, that's not to mention that there is no shortage of domestically built low-cost smartphone offerings from up-and-coming local OEMs like Huawei, ZTE, and Xaiomi.
Meanwhile, in Japan, Sony obviously holds an advantage, as Japanese consumers are more likely to flock to its brand. Needless to say, that's mixed news for Samsung, which currently controls just 9% of the Japanese market.
In addition, Sony also enjoyed extending its lead over Apple in Japan earlier this summer, helped by both its rollout of new Xperia smartphone models, as well as a significant marketing push and discounts from Japan's largest wireless carrier, NTT DoCoMo (NYSE: DCM). All told, Sony's products made up an impressive 36% of all smartphone shipments in Japan at the time, compared to 25% for Apple.
Then again, NTT DoCoMo was also promoting Samsung's Galaxy S4 at the time, and the marketing effort was largely pursued to make up for the fact that it stood alone as the only Japanese carrier that didn't have a deal in place to sell Apple's iPhones. But now that NTT DoCoMo does have the iPhone -- albeit in limited supply -- it's possible NTT could start pushing the iPhone more going forward to make up for lost time, and win over otherwise-impatient Japanese consumers.
In the end, though, while I agree that this is Sony's best chance at remaining a significant player in smartphones, this also gives Apple and Samsung an even bigger lead in the markets that really matter. Eventually, that's why I'm convinced Sony will ultimately need to cede the smartphone space to its stronger competition.
