Sony Mobile has been in transition ever since it wrote-down huge losses in its mid-range portfolio back in Autumn 2014. The company’s strategic focus moved to profitability over scale, looking to support a smaller number of handsets primarily focused on the premium smartphone segment. The result of this strategy shift has seen Sony Mobile report ever-lower smartphone volumes, so much so that it is only forecast to ship 3.5 million units during the first calendar quarter of 2016 – the lowest number of devices shipped since summer 2011.
However, the flip side to a more focused approach towards the premium segment is that Sony Mobile delivered the highest unit ASPs (average selling prices) in the Android ecosystem during the fourth quarter of 2015. Sony’s Q4 2015 ASP of $422 was 78% higher than second-placed HTC ($237). Samsung was just behind HTC with an ASP of $225. Of course, Apple reigns supreme overall, with an ASP of $691.
This higher ASP performance from Sony also translated to profits per unit, with the company being the most profitable by unit when compared to all of the traditional Android smartphone OEMs. Sony had a profit per unit of $26, 13% higher than second-placed Samsung at $23. Apple is on another level though, with profit per unit of $184 during Q4 2015.
Interestingly, Sony is also apparently the only Android OEM that has managed to raise ASPs over the past year. So it looks like Sony’s strategy is starting to pay off, at least when looking at unit numbers. The focus on profitability and not scale is bearing fruit. However, as mentioned earlier, the continual fall in volumes must worry the company. After all, the operating leverage aspect means that Sony needs to sustain a certain level of volume just to cover its fixed cost base.
It will be interesting to see whether the Xperia X series and whatever Sony has up its sleeve for H2 will be enough to create the bounce in volumes later in the year.
Comparison between LG’s and Sony’s ASP over the past year
Quote from The Overspill:
“Look at the contrast between Sony and LG. LG sold nearly twice as many phones, but Sony made a respectable profit, while LG made a loss. What’s the difference between them? ASP. Sony’s phones sold at an average price of $421.58, while LG’s were half that – $210.26. (This doesn’t mean that every LG phone sold at that price, or every Sony phone. But it tells you that Sony must have sold a lot more expensive phones than LG.)”
The Android customer flow during 2015
Thanks Jas, Orion (Is Dormant) and SonyFan!