Despite purchasing Ericsson and going at it alone which has resulted in some beautiful products, Sony Mobile has struggled to gain much traction globally. In the last two years alone, Sony Mobile has seen their year-over-year sales decline with Apple dominating the premium market and handset makers from China like Xiaomi and Huawei eating into the low-end market. With an inability to compete in either market, Sony has been squeezed in a middle ground that’s proving hard for them to sustain. With a focus on premium products, Sony could at least count on greater profit margins on each unit sold where the entry market would provide them with increased revenue.

No country better represents this than China where the middle class is booming with a population of over 300 million who can afford premium products and even more who can afford an entry class device. Unfortunately for Sony, they’ve been unable to capitalize on it and they are signaling a significant downsizing from the country.

According to an investor documents, while Sony plans to stay in China, expect to see a lot less of their products there.

 China: Drastically downsized this business, so continue to operate the business in limited channels with minimized costs 

Based on the above statement, Sony likely wants to keep their toes in the country in case things in the future change while at the same time, not investing too much capital where they cannot compete. Some might question why Sony should stay there in the first place, as the cost of completely retreating from a country, only to later reenter tends to be significantly higher. Unfortunately for Sony, this marks yet another lost territory where competitors are flourishing with a consumer base that’s hungry for premium products, something that Sony excels at making.

For those playing at home, the other country is of course the United States. Just yesterday we revealed how the US is Sony’s lowest sales region by a wide margin. Second on that list? China.

Discuss:

Should Sony completely withdraw from China and focus their efforts and resources in other territories?