Japan’s fad-loving consumer may derail Sony’s phone ambitions

By Hiroko Tabuchi  /  NY Times News Service, TOKYO

Sun, Jun 30, 2013 - Page 14

Sony’s Xperia Z smartphone, which went on sale in February, has already sold almost 1 million units by some estimates. However, NTT DoCoMo, Japan’s largest mobile carrier, will soon stop selling it.

The Xperia Z has not even hit the US market yet — T-Mobile says the model will make its debut on its network in the coming weeks — but it is already a has-been in Japan. DoCoMo has turned its attention to a new phone, the Sony Xperia A — a model with fewer features that has not won the stellar praise showered on the Z.

“It’s time for a new model,” said Mai Kariya, a DoCoMo representative in Tokyo. “We’re finished with the Xperia Z and now focusing on the Xperia A.”

As Sony banks on smartphones to turn around its struggling electronics business, it faces an increasingly bothersome obstacle at home: the demands of Japan’s powerful cellphone carriers, which remain obsessed with constant model updates.

For years, Japan’s three largest mobile network companies have pressed phone makers to update their handsets every three or four months, providing Japanese consumers with a dazzling array of newfangled phones and features each season.

Phones with digital TV broadcast receivers were once all the rage; a phone without it was never going to sell. Then it was thumbprint scans; you would be hard pressed to find those on many phones today. The same is true of swiveling screens, and to a lesser extent, electronic wallets.


The fast-paced cycle is commonplace in Japanese marketing. Manufacturers deliver short runs of seasonal products to create buzz, analysts say. Pepsi Japan, for example, brings out limited-edition drinks each year: Salty Watermelon Pepsi or Pepsi Ice Cucumber. Nestle’s KitKat candy bar has cycled through an eye-popping array of limited editions in Japan: green tea, pumpkin, strawberry cheesecake, wasabi and soybean, to name only a few.

Even Japan’s best-selling pop group, AKB48, rotates through a cast of 67 members and on New Year’s Day released 16 versions of new and repackaged records.

“This is the worst of Japanese companies’ excessive obsession with the new,” said Yuichi Kogure, an associate professor in information technology policy at Aomori Public University and the author of several books on Japan’s cellphone industry. “But now the mobile phone makers are exhausted.”

Sony’s Xperia Z got caught in this marketing buzz-saw. DoCoMo started selling the Xperia Z in Japan on Feb. 9 as part of the carrier’s spring collection, replacing the Xperia AX of the winter collection last year. Barely a month later, on March 15, DoCoMo announced its summer collection of 11 new phones, with the Xperia Z replaced by the Xperia A, which went on sale last month.

The constant feature roulette has helped carriers lure customers away from rival networks, but it taxes the research and development resources of Japan’s phone makers, who must meet the constant demands from carriers for new high-end features and frequent handset renewals.

Not every maker succumbs to this whirligig and, not surprisingly, those that do not are not Japanese. Apple has announced a new iPhone model roughly once a year. Its iPhone 5 came out in September, and the company is not expected to introduce a new model until the fall. Samsung Electronics is focusing its resources on its sleek Galaxy S4 smartphone, which went on sale in April, a full year after its predecessor the Galaxy S3.

The scattershot efforts by Japanese handset designers could not compete with a single blockbuster product like Apple’s iPhone, Kushida said.

It turned out that Japanese consumers did not want a new phone each season after all, but one very well-designed one, he said.

Since its release in 2008, the iPhone has been a best-seller in Japan, becoming the most popular handset in the country. Last year, the iPhone led all handsets with an overall market share of 15 percent, ahead of former market leaders Sharp and Fujitsu, according to market researcher International Data Corp Japan.

Looking at smartphones only, Apple’s dominance in Japan is even stronger: For the first three months of the year, Apple’s mobile platform market share came to 49.2 percent, compared with Android’s 45.8 percent, according to Kantar WorldPanel, which tracks mobile phone sales in major markets.

Sony’s Xperia Z, which runs on the Android operating system, was shaping up to be Japan’s greatest challenger to the iPhone and to another global blockbuster, Samsung’s Galaxy series. The Xperia Z won rave reviews for its sleek aluminum case, sharp 5-inch display, fast-capture camera and high-definition video.

The Xperia Z has topped sales charts, selling at least 630,000 units in Japan in its first 10 weeks, according to the data provider, GfK Japan. DoCoMo had said that it aimed to sell about 1 million units in Japan, and analysts agree that sales are approaching that number. Sony chief executive Kazuo Hirai has repeatedly promoted the Xperia Z’s strong sales in Japan as one of the few bright spots in its money-losing electronics sector.

Still, production of the Xperia Z has ceased for the Japanese market, and the model will no longer be available in Japan once stock runs out at retail stores across the country, both Sony and NTT DoCoMo said.

“The Japanese market operates on a far quicker life cycle than markets overseas,” said Yu Tominaga, a Sony spokesman in Tokyo. “Demand changes fast here, but we are set up to respond to that.”


The big question is whether Sony can develop a coherent global smartphone strategy without being distracted by the ever-changing needs of its home market. A lot rides on Sony’s gaining on its archrivals, Apple and Samsung, in the fast-growing smartphone market with the new Xperia A, which has been topping sales charts here since it went on sale in the middle of last month.

Sony is starting to shift its focus beyond Japan’s shores. On Tuesday in China it announced the Xperia Z Ultra, which Sony bills as the slimmest large-screen handset on the market. The company said it was not sure when that model might sell in Japan.