Sony is finally starting to sell more Xperia phones

After Sony's Xperia smartphone business reported its first profit in years at the beginning of 2021, more good news for fans of the Japanese brand is coming our way. According to Sony’s latest earnings report, the revenue in the mobile communications segment for the second quarter of 2021 was approximately 25% higher than the revenue for the same period last year.

Sony’s mobile business managed to haul 99.1 billion Japanese yen (~$871.6 million) in Q2 2021 versus 79.1 billion Japanese yen (~$695.7 million) in Q2 2020. The interesting part is that these numbers are not a result of the higher prices of Xperia phones, but instead due to an “increase in unit sales,” as the company confirmed in the report.

That’s pretty impressive, especially when the world is struggling with semiconductor shortages affecting all market segments, and shipping numbers. Just take a look at the PlayStation 5 situation and you’ll understand how impressive it is that Sony managed to ship more Xperia phones in this business climate.

If we look back at revenue numbers in the past few years, there’s an emerging recovery trend for Sony’s mobile division. In Q1 2021, the mobile business saw a 12.8 billion Japanese yen (~$112.6 million) loss compared to Q1 2020. Things got even worse in Q2 2019 compared to Q2 2018, with a 37.1 billion Japanese yen (~$2.4 billion) down the drain.

The first signs of that aforementioned recovery came in 2020 when the mobile division of the Japanese company turned a profit, and it seems that this trend is continuing in 2021. Mobile communications reported a 7.1 billion Japanese yen (~$469 million) growth in fiscal H1 2021 compared to the same period last year.

Is Sony going to become a major player in the smartphone market?

That’s very optimistic, to say the least. Yes, the company is recovering and selling more phones making a profit but the market share is still not there. In 2017, Sony Mobile held less than 1% global market share, 4.8% in Europe and 16.3% in Japan.

Things weren’t looking better in 2020 - the sub-1% market share persisted forcing the company into the dreadful “others” part of the market share charts. What’s even worse is that Sony’s market share in Japan fell to 9.73% in September 2020, and further down to 7.64% by September this year.

Looking at these numbers it is hard to imagine where all these more shipped Xperia phones have gone. Sony’s market share in Europe remains below the 1% mark (0.79%) as of September 2021, and the company is still not showing up on charts in the US.

Our take - the Xperia high-end struggle

Sony decided to aim for the stars with its reincarnated Xperia lineup in 2019 and started to offer just a handful of devices with high-end features and a premium price tag. The Xperia 10 model remained the sole budget option in the portfolio, while the Japanese company introduced even more expensive models oriented towards professionals, such as the Xperia PRO and Xperia PRO-I.

This strategy might bring home some revenue and turn a profit, as profit margins for these devices are probably pretty high but it won’t bring home market share. It seems that Sony is consciously limiting itself and aiming toward a pretty small demographic. The way we see it is that Sony might flip the trend and start making money on Xperia phones but the company probably won’t punch above that 1% market share in the foreseeable future.