Xperia Z1S a lifeline as Sony treads water in US

There's a strong feeling of deja vu as Sony again attempts to break into the US market with another waterproof phone.

The Xperia Z1S from Sony. Brian Bennett/CNET

LAS VEGAS -- Sony is back at the Consumer Electronics Show with a waterproof phone. Sound familiar?

It was roughly a year ago when Sony showed off its Xperia Z, which was the first time the company corralled the strengths of its various business units, taking expertise and technology from its television and camera divisions and wrapping it all up in a waterproof body. The phone was supposed to be the start of Sony Mobile's comeback story.

It only sort of happened.

Over the past year, Sony switched from one exclusive US carrier partner to another and, yes, slightly increased its market share both in the global market and in the US. But when it comes to smartphones and tablets, Sony's name is rarely uttered in the same breath as powerhouses Apple and Samsung Electronics, or even distant rivals LG, HTC, or Nokia.

Sony has been swept up in what has been an ongoing theme in the smartphone business -- that of Apple and Samsung squeezing out virtually all other competitors from making a significant dent in the market. Sony is that odd, well-known company that should in theory be able to create a blockbuster product easily -- just look at the demand for its PlayStation 4 -- yet somehow keeps whiffing.

"It's one of those companies where you look at all the assets on paper and you wonder why they aren't a bigger success in smartphones," said Jan Dawson, analyst at Jackdaw Research.

Sony's share of the global market for smartphones has risen only modestly over the past year, ticking up to 3.8 percent from 3.4 percent a year ago, according to Gartner. In the US, the progress is even more miniscule, rising 0.4 percent from 0.3 percent a year ago.

In comparison, Samsung controlled a third of the global market, while Apple accounted for 12.1 percent in the third quarter, according to Gartner.

Here we go again
Sony is at it again with the Xperia Z1S, an upgraded version of last year's smartphone and an altered version of the existing Xperia Z1, customized specifically for T-Mobile. It comes with a faster processor and better camera and, of course, it can be safely dunked in a water tank. In fact, the company touts it as the phone with the best camera in a waterproof body.

It is in many ways a do-over from a year ago, as Sony touts the same advantages that come from running various technology businesses.

"We keep increasing the assets from the other parts of the Sony family," said Stephen Sneeden, a product marketing executive for Sony's US mobile business.

The Xperia Z1's 20.7MP camera employs the same lens and image-processing engine as what's in many of its digital cameras. The "Triluminous Display," which is a different form of backlighting, comes from its Bravia TV line. The phone also includes audio touches from its Walkman media player line and will come with an app that ties into the Playstation 4, giving users the ability to purchase remotely and direct the console to download a video game.

Sneeden teased more integration between the phone and select PS4 games and the console itself, which would tie the Xperia Z1S with the hottest product in Sony's lineup.

A '"dysfunctional" company
That its line of Xperia smartphones hasn't picked up the same kind of steam as the PS4 is the result of the company's late push to turn itself around. Sony couldn't move at full speed until it bought out Ericsson's stake in their joint venture, turning Sony Ericsson into Sony Mobile in early 2012.

The PlayStation 4 remains Sony's brightest spot. Sarah Tew/CNET

But Sony has gotten in its own way, particularly in the way the different units communicate or, rather, don't communicate.

"Sony is a dysfunctional organization in some ways," Dawson said. "They have great assets, but they're all in different units that don't play nicely together."

Sony is trying to change under CEO Kaz Hirai, but still has a long way to go.

Meanwhile, the company also faces a public perception problem. While older consumers have fond memories of high-end Sony Trinitron televisions and Walkman cassette players, its brand as a consumer electronics company has faded considerably over the years.

For many, Samsung and, to some extent, LG, have replaced Sony as the go-to brand for consumer electronics.

T-Mobile's flagship phone
Sony does have some reason to be a little more confident in the Xperia Z1S, as the company has lined up an exclusive US carrier partner in T-Mobile.

It's a far cry from the past, as up until 2012, AT&T and Sony had a solid, if unspectacular, partnership. The carrier regularly had an Xperia phone in its lineup.

That changed last year, as AT&T opted not to pick up the Xperia Z. So, despite unveiling the phone in January at CES, the phone was only available as unlocked and sold at full price with extremely limited distribution.

Sneeden declined to discuss what happened with AT&T, and AT&T declined to comment on the relationship.

T-Mobile CEO John Legere at the March 26, 2013, press conference.
T-Mobile will have its own splashy press conference at CES. Lori Grunin/CNET

The omission of Sony from AT&T's lineup was largely because of the lack of success the phones had with the carrier, according to a person familiar with the carrier's product strategy.

Brenda Fisher, a senior product manager for T-Mobile, quipped that, "Sony ended up with a better partner."

Sneeden would only say that the "challenger position on both sides allowed them to blend well."

Still, it's debatable whether the Xperia Z got a bigger push at T-Mobile than past phones at AT&T. It had a brief window with some heavy promotion, where it was highlighted alongside the Lumia 925. T-Mobile even put in special dunk tanks in select carrier stores to demonstrate the waterproof capability.

Fisher said the Xperia Z1S would get the flagship treatment when it launches on Jan. 22. She said that the launch was timed so that it would occur around six months after the first Xperia Z launched, allowing members of its JUMP early upgrade program to move up to the new phone.

Likewise, the campaign would focus on customers who own or have owned a Sony product.

In theory, that sounds great. But as Sony has demonstrated over the past year, execution is a whole other matter.

 

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