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Sony's Apple Killer?: A Smartphone That Can be Dropped Down the Toilet
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Sony is making an unusual pitch for its latest smartphone: “Don’t worry if you drop it in the bath or the toilet. It will still work after 30 minutes submerged in water.”

Although this is apparently the most effective waterproofing claim ever made for any smartphone, it seems an underwhelming USP. The new phone, the Xperia A (which confusingly is the successor to the better-known Xperia Z) is nonetheless proving a smash hit in Japan, where it was launched in mid-May. As recounted by Hiroko Tabuchi of the New York Times, it has been comfortably outselling rival offerings from Apple and Samsung. Until recently Apple had been the dominant smartphone player in Japan as elsewhere.

As an added bonus, the Xperia is dustproof, which no doubt is useful if you work in a flour mill or get posted to Kabul in August.

I put all this to Pete Cunningham, a British-based analyst with Canalsys, who has recently returned from a fact-finding mission to Tokyo. He reports that the waterproof feature is considered by Sony executives to be a big selling point. Cunningham comments: “It is hard to know how many smartphones have to be repaired because of water damage but I wouldn’t underestimate the waterproof factor. Some people carry their smartphones everywhere – the shower, the bath, the toilet. One person I know has dropped his phone in the toilet and another has spilled his drink all over it. People even want to use their phones in the pouring rain.”

Cunningham is not convinced, however, that the Xperia A will prove such a sure-fire success if and when it is introduced in the United States. The problem is that Apple brand loyalty is stronger there. “The iPhone’s specifications fall short compared to those of many competitors but that does not matter all that much,” he says. “Apple retains its user base because customers have invested in applications. These are not easy to transfer to other platforms.”

Still, my bet is that Sony is on an upswing. Certainly it has been showing every indication in recent years that it is taking the smartphone business more seriously. One hint came in 2011 when it bought out Stockholm-based Ericsson’s interest in their jointly owned handset business.

Cunningham may be right that Apple’s customers are particularly loyal (I know the feeling – I am an Apple user myself). But there is no getting away from the fact that Apple products are pricy. With the benefit of Moore’s Law and similar dynamics, smartphone prices are consistently falling which means that new customers are constantly emerging who have never owned an Apple. They have no investment to write off and for the most part they are more price-sensitive than Apple’s traditional customers. For anyone who thinks a few years ahead that does not bode well for Apple’s margins.

(Republished from Forbes by permission of author or representative)
• Category: Economics • Tags: Sony 
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