Why Sony vows to stay in the smartphone business: The Internet of Things

Squashing sale rumors, Sony's Hiroki Totoki says the smartphone plays too important of a role in controlling a vast array of connected devices.

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Michael Homnick

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Don’t expect Sony to give up on smartphones like it did with PCs last year.

Speaking with Arabian Business, Sony Mobile President and CEO Hiroki Totoki countered rumors that the company might sell off its phone business. Sony is the 10th-largest phone vendor according to Gartner, but the business is losing money, and in January sources told Reuters that the company was mulling a sale or joint venture for its phone operations.

Totoki put those rumors to bed, but for a somewhat surprising reason: “Smartphones are completely connected to other devices, also connected to people’s lives—deeply. And the opportunity for diversification is huge,” Totoki said. “We’re heading to the IoT (Internet of Things) era and have to produce a number of new categories of products in this world, otherwise we could lose out on a very important business domain.”

In other words, giving up on the smartphone would mean losing a central control point for smart homes, smartwatches, and countless other connected devices. “In that sense we will never ever sell or exit from the current mobile business,” Totoki said.

Still, it’s unclear what Sony’s Internet of Things plans look like. The company has launched a few smartwatches and a fitness band, and is trying out some experiments like an inventors kit for IoT devices, but none of it adds up to a coherent ecosystem like the ones AppleSamsung, and Xiaomi are trying to build.

The story behind the story: Sony’s upside has always been capped by its inability to make a dent in the U.S. market. And as a high-end smartphone vendor, it faces the same challenges as Samsung and LG in fending off a wave of low-cost competitors making “good enough” smartphones. Without a well-defined audience and clear strategy, it’s hard to see how Sony to make its phones an essential piece of the IoT puzzle.

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