Sony is signaling that it again wants to be a bigger player in smartphones, especially in the U.S., after announcing a partial retreat more than a year ago.
Sony announced Thursday that its Xperia Z5 and Xperia Z5 Compact smartphones will go on sale unlocked in the U.S. starting Feb. 7. The phones will be available at Amazon, Best Buy and other retailers for $600 and $500 respectively.
The global smartphone market, and especially the U.S. market, is heavily dominated by Apple and Samsung. Sony, which ranked eighth in 2014 with a 4% market share, recently dropped out as one of the top 10 smartphone providers worldwide, according to TrendForce.
In the third quarter of 2015, IDC said Sony ranked 12th globally, with less than a 3% market share and ranked 14th in the U.S. with less than a 1% share.
Both Z5 phones will support Android 5.1 (Lollipop) and GSM networks, which include AT&T and T-Mobile in the U.S. Both phones will also run Qualcomm Snapdragon 810 processors. The Z5 has a 5.2-in. display, while the Compact's is 4.6 inches. Both boast camera superiority with 23-megapixel rear and 5-megapixel front-facing cameras on each model.
Amazon already sells the Xperia Z5 on its website through a company called Quality Deals Shopping Center, but that is an international version with no warranty. The upcoming Feb. 7 releases presumably come with Sony warranties, among other differences, analysts said.
A Sony spokeswoman said the U.S. variants of the Z5 and Compact will not have fingerprint sensor technology as the international versions do.
She added that Sony sees a “growing trend” for unlocked devices. Also, she said Sony is moving away from its past strategy of volume in smartphone sales and instead “pursuing profit by optimizing business scale. Developing a stable business in the U.S. remains an important part of this strategy."
In late 2014, Sony warned of losses on smartphone sales and said it would only sell premium-quality smartphones. The upcoming release of the two Xperia Z models in the U.S. likely indicates that Sony again wants to advance with a wider variety of smartphones, said Patrick Moorhead, an analyst at Moor Insights & Strategy.
"This move could indicate Sony getting back into the smartphone game," Moorhead said. "Sony wanted to pull back on mobility a year ago, but reality has probably set in."
Moorhead said that while Sony stands little chance of going head-to-head with Samsung or Apple in coming years, it's crucial that the company be somewhat successful in the smartphone arena. That's because more video is being streamed to phones and tablets and less to TVs — a traditional stronghold for Sony and other Asian electronics makers, he said.
"A lot of Sony's core technology is camera sensors, so it's odd that a company really good at miniaturization and cameras would consider getting out of smartphones and not have a big presence there," Moorhead said. "Sony can't just exit every business, and even got out of PCs, so they have to confront the smartphone enemy now with the display and TV markets shrinking."
Sony previously sold the Xperia Z3 smartphone and other models through U.S. carriers, he noted.
"Sony has always had good designs and top quality cameras and video capabilities in smartphones, but so far hasn't been able to get that into the heads of retailers, carriers and consumers," Moorhead said. "Recent Sony phones have delivered really good experiences, but their marketing and distribution has been a bit soft for the U.S. market, which is dominated by Apple and Samsung and is carrier-led."
Carolina Milanesi, chief of research for Kantar WorldPanel, said the unlocked price of $600 for the larger Z5 will probably be too high to produce big results for Sony. "With a price tag of $600, I struggle to see how they will be able to sell in volume," she said. "The unlocked market is a very difficult one. The Xperia brand is still a brand that your average consumer is not very familiar with."
IDC analyst Anthony Scarsella went further: "An overwhelming majority of consumers in the U.S. are still unaware that Sony actually makes smartphones." He said that's because Sony doesn't have dedicated support from carriers and has lacked big marketing campaigns.
But Scarsella is still a big fan of the latest Xperia smartphones and currently owns and uses the 5.5-in. Xperia Z5 Premium model. He tried out both the Z5 and Z5 Compact at the Sony booth at CES 2016 recently, and has owned the earlier Sony Xperia Z, Z2 and Z3 models, going back to 2013. (Sony has not officially put the Z5 Premium model on sale in the U.S., although it is available without a warranty.)
"The build quality of the [latest] devices is top notch and all three Z5 models feel very high-end and solid in the hand," he said. All three models come with an IP68 rating for water and dust resistance, which is not found on many competing products, he added.
The camera on his Z5 Premium is "very high end and capable of competing with the iPhone 6S and Samsung Galaxy Note 5." Many of Sony's competitors even use the camera sensors made by Sony, he noted.
Its new efforts could be a sign that Sony's worst smartphone troubles could be behind it, analysts said. In the last year, Sony's Xperia Z4v was canceled on Verizon due to a launch delay, and T-Mobile pulled the Xperia Z3, Scarsella noted. Sony even stopped direct sales from its website a few months back and there have been rumors that Sony would sell off its entire mobile division, Scarsella said.
However, more recently, Sony opened a factory in Thailand, and Sony CEO Kazuo Hirai has committed to building "products that matter" there, Scarsella said. "It's hard to tell if this 'products that matter' includes mobile," he said. "We view 2016 as a pivotal year for many large smartphone players, and Sony [has been] right at the top of that list."
Scarsella said Sony's mishaps with Verizon and T-Mobile might have led the company to work with retailers instead of carriers, which is "better than nothing." Still, he said other unlocked handsets like the Nexus 5X, Moto X Pure and ZTE Axon offer similar specs at lower prices.
"There is no doubt in my mind that the Z5 devices are a class above these other handsets in terms of power and design," he concluded. "However, the lack of branding, marketing, direct financing and previous mishaps at Verizon and T-Mobile will make these devices a hard sell to the average U.S. smartphone buyer."