Sony eyes No 3 global ranking in smartphones

Japanese electronics giant pins hopes on new handset through China and US markets

PUBLISHED : Thursday, 05 September, 2013, 9:49am
UPDATED : Friday, 06 September, 2013, 3:51am

Sony is betting its Xperia Z1 handset will propel it to the No3 spot in the global smartphone market, leaping from seventh place by vaulting past competitors such as LG Electronics and Lenovo.

The Xperia Z1, which comes with a 20.7 megapixel camera and will be in stores this month, would help it gain ground in the United States and China to become the biggest rival to Apple's iPhone and Samsung Electronics' Galaxy devices, said Dennis van Schie, Sony Mobile Communications' sales chief.

The company also announced a zoom-lens-style camera for smartphones.

"Our ambition is to become a top three player," van Schie said at the IFA consumer electronics show in Berlin on Wednesday. "We are, right now, enjoying fantastic momentum in the markets where we play. We are breaking into the US; we are building momentum in China."

Sony has its sights set on a market dominated by Samsung, which controlled a third of smartphone sales globally in the second quarter, according to research from Gartner.

Apple, which unveils its new iPhone next week, has 14 per cent of sales, with LG, Lenovo and ZTE rounding out the top five.

"Sony has done a good job to differentiate itself from others," said Junya Ayada, an analyst at Daiwa Securities in Tokyo. "If Samsung does not introduce new smartphones in the second half of this year, I think Sony can continue to enjoy its momentum towards the end of this year and expand its global share."

Shares of Sony have more than doubled this year.

Sony is gaining in Europe with cheaper handsets, according to Kantar Worldpanel ComTech. Still, the Xperia Z1, which uses Google's Android operating system, points to Sony's aspirations in the more profitable premium market dominated by Apple and Samsung.

"While many of our competitors are struggling for their survival, we are turning around, we are delivering according to plan," van Schie said. "For us, the growth mode is there, also in the high-end segment."

Sony's device division generated operating profit of 10.9 billion yen (HK$846 million) in the June quarter with most of the earnings generated by sales of chips, Deutsche Bank estimates. The division was the biggest source of profit after its insurance business.