Let the winner beware as tech’s smartphone war comes to an end

THE smartphone war is over, and the winners are in big trouble. While no one actually said it, that could have been the underlying awareness driving a Q&A session hosted in Tokyo on Wednesday by Hiroki Totoki, president and CEO of Sony Mobile Communications.

“The high-end smartphone segment is mature and we cannot expect more growth in terms of market size,” he said of Sony’s prospects for taking on Apple and Samsung.

“In these circumstances, we have to maintain our market share. But, to sustain our business, we have to develop new product categories.”

Sony Mobile’s market share is, frankly, dismal, given that both the Sony and Xperia brands are associated with superior technology and iconic brands.

The Sony Xperia Z series has been unparalleled by all but Samsung in camera quality, but the South Korean company has run rings around it in sales.

“Our share of the smartphone market is small,” Totoki acknowledged. “A 3% player is not a big player; a 3% player is a challenger. And the challenger has to have very cutting-edge technology and services to expand in any particular market.

“It takes a lot of resources and investment to fight with a big brand, and we have limited resources compared to the giants.

“In this case, we have to concentrate on specific markets to increase our business.”

That prospective market, it became clear from Totoki’s comments, revolved not around the smartphone, but around the concept of the Internet of Things, or IoT.

More specifically, around smart devices.

The Internet of Things had a broad meaning, he said.

“In the smartphone market we have only one market. But if we balance it with services, those must be localised to each country and each segment, because the services people want are different in every country and every segment.

“That market will be fragmented, rather than controlled by the giants, so we have a chance to develop new business segments. We’d like to create unique products, combined with services and smart devices, for such markets.”

Asked by Business Times how Sony would hope to compete with initiatives from global brands such as Intel and Samsung, Totoki stressed that it was not about the devices, but about bundling them with content and services.

“Once we bundle IoT with a service, the landscape will be very different,” he said.

The key question, of course, is whether the smartphone itself will remain relevant. After all, it is a concept that is not even 10 years old, having been reinvented by Apple in 2007, on top of BlackBerry’s earlier provenance.

Totoki offered no comfort to smartphone diehards: “The smartphone is only one form factor. It consists of a chipset, a telecommunications modem chip, a battery and a screen.

“That basis can be utilised in any form factor. That’s why we are trying products like Agent and the Xperia Projector [see Page 7]. Inside those devices, as with the smartphone, we have a battery and chipset, along with intelligent features.”

Can Sony go beyond the smartphone? It has little choice. But, as the giants protect their hardware turf, that may well be a blessing in disguise.

Rather than defending artefacts of the early 21st century, Sony is embracing a phoneless future.

Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter @art2gee, and subscribe to his YouTube channel, http://bit.ly/GGadgets