How Sony can regain its cool factor in smartphones

LAS VEGAS -- Sony hopes its Xperia smartphone brand will ultimately reach the same heights as its vaunted Trinitron and Walkman lines.

It'll be lucky if it can get a consumer to even remember the Xperia name.

"Sony needs people to know that we make phones," said Calum MacDougal, director of Xperia marketing for the company.

That's the uphill climb that Sony faces in the ultra-competitive smartphone business. The truth is the company is so far behind -- particularly in the U.S. -- that it will take a monumental leap this year just to get back into the game.

"From a US perspective, if they can simply become relevant in the handset space, that would be a remarkable improvement for them," said Charles Golvin, an analyst at Forrester Research. "That's the best that they can aim for."

Here at the Consumer Electronics Show, Sony is one of the few companies to unveil new smartphones, part of a broader line-up of products and services it announced at a press conference today. While many of the well-known smartphone manufacturers and carriers have held off on announcements, Sony is hoping to take advantage of the relatively blank mobile slate.

Sony's story is a familiar one: its mobile business, which had long been part of a joint venture with Ericsson, had a comfortable position during the basic phone era, but found itself shut out when the industry moved to smartphones and it didn't. It then hopped on to the Android bandwagon -- some would argue too late -- in an attempt to catch up to larger, better known rivals.

As a result, its market share in the key smartphone business is paltry. In the third quarter, Sony's phones accounted for 3.9 percent of the global market, compared with 4.8 percent a year ago, when it was still known as Sony Ericsson. In North America, its share is an even more abysmal 0.3 percent.

Now, Sony has held full control over the business about a full year, having bought out Ericsson's stake in late 2011. Sony executives believe they have a far better product that takes better advantage of the company's various resources.

"This is the best of Sony in a smartphone," MacDougall told CNET.

Last year, Sony made a small bit of progress by introducing the Xperia TL, its flagship phone, through AT&T. As an added bonus, it was used by James Bond in the most recent film in the series, "Skyfall" (not coincidentally, a Sony-produced film). But even the mojo of 007 couldn't save the Xperia TL from getting dumped into a crowded market, where it was just one of many so-called flagship phones sold during the holidays.

At CES, Sony unveiled the Xperia Z and Xperia ZL. The phones, which leaked over the Internet ahead of the show, represent their flagship devices for the first half of the year, and will launch globally in the first quarter. Sony executives declined to comment on pricing or specific availability in the U.S.

It's unclear when these phones will end up in the U.S. through a carrier partner, something Sony has struggled with in the past. While AT&T took a chance on an Xperia phone last year, the carrier didn't put much marketing support behind the device. Still, the phones represent Sony's latest -- and, so far, best -- chance to turn things around on the mobile end.

Here's how Sony can get back into the good graces of cellphone consumers, and how the Xperia Z and ZL attempt to accomplish just that.

Take advantage of the cool brands that are left. Sony still has an amazing asset in the PlayStation console gaming franchise, so why not tie together the Xperia smartphone line with PlayStation? It couldn't hurt to link a relatively unknown brand in Xperia with the cooler PlayStation name.

Of course, the connection can't be in name alone. Sony Ericsson attempted to make the connection with its half-baked Xperia Play, coming up with the iffy term "PlayStation-certified" in a half-hearted attempt to link Android-based games with its PlayStation catalog. It didn't work.

Sony recently released a new software development kit for a new generation of PlayStation-certified games, which it hopes will better tie it to its console. The Xperia Z and ZL feature a PlayStation Mobile icon that link to those games.

Tie together different products. Sony, like Samsung, makes a number of different consumer electronic devices beyond phones, including televisions and PCs. Sony needs to do a better job of making them all work together, potentially tying them together with an app or a slick, common interface.

"You need to make the Sony portfolio work for you," said Roger Entner, an analyst at Recon Analytics.

Sony needs to look at its Xperia phones as one part of a modular system where devices can easily fit together. While Sony is already starting to do that, it needs to make the set up easier (read: no wires).

"It has to be Apple easy," Entner said.

Sony also needs to educate consumers better on how the products work together and what its advantages are, according to Julien Blin, an analyst at Infonetics.

The Xperia Z and ZL both feature NFC capabilities, and Sony introduced five televisions with NFC built into the remote. Users tap the phone on the remote to link the TV to the phone, and use Wi-Fi Direct to send over videos and pictures. Unfortunately, the specific use of NFC means that it's unlike non-Sony TVs work with this feature.

Execute on the basics. The Xperia TL was a solid phone. But was it a phone that stood out? Not really. The company used to be known for design, and it needs to channel those skills again. That means a slimmer phone with a clearer, brighter display, more horsepower, longer battery life, and a more powerful camera. Sony can't assume its name will attract attention; it will need to forcefully turn people's heads with better features.

"They are good devices, but they aren't dramatically better," Entner said.

Paraphrasing Avis's well-known campaign, Sony needs to try harder.

The Xperia Z is a sharp-looking phone that looks and feels light and thin despite its large 5-inch display. It includes a lot of the bells and whistles found in a standard premium phone and then some, including the ability to get dunked underwater and still take phone calls and send music to a wireless Bluetooth speaker accessory.

Use original content as a hook. Sony is in a rare position where it own studios that produce television shows, movies, and music.

"They can focus on original content to differentiate its smartphone offering," Blin said, who called it a key strength for Sony.

There's nothing like a hot show or movie to generate a little buzz, and Sony could use all of the attention it can get. Its appearance in "Skyfall" was a nice start, but it's likely that most consumers missed out on the phone because of its generic design (I just barely saw it in one scene, and wasn't even sure it was the Xperia TL).

Sony needs to be known as a smartphone company. Sony's image in the U.S. is fairly bland. Many people likely remember its heydays, and maybe associate it with one or two products. But rarely do people see it as a smartphone company. That needs to change if the company wants people to take Xperia more seriously.

The company appears to acknowledge this. MacDougall said that the next campaign, which would be bigger than before, would focus more on Sony, as opposed to a gimmick like a James Bond film.

"They need to create a stronger brand and identity around smartphones with marketing campaigns focusing on its strengths," Blin said.

Ultimately, none of these steps are going to guarantee success. But perhaps the company will get some folks looking at its direction a bit more frequently.

"People have a strong residual goodwill to the brand," MacDougall said. "We'll have a much more Sony-centric story."

Handling the Sony Xperia Z and ZL (pictures)

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