Dumbest Move in Smartphone Marketing This Year - Sony Rebrands Xperia Z4 Into Something Less

This is sheer madness at Sony. I can't believe they did this, and more than that, I can't belive they would make such a massive - unforced - marketing blunder now. Now. When they were about to have their Razr Moment of quick market gains while the rivals stumble, and also while Sony has fired over 1,000 people so there is confusion in the ranks and that is when you want stability from the strategy. This is such an epic mistake, this is 'Eloppian' as in the worst CEO of all time, Stephen Elop over at Nokia its shortest-duration CEO who wrecked their growing and highly profitable handset business. And hat tip to Ewan Spence who wrote about this over at Forbes last week.

What is going on? The Sony Xperia Z4 was set to be the top dog, at least briefly, in the Android army and arguably the best smartphone in the world. The Apple iPhone launch cycle is peculiar with their phones released only once per year (I expect as Apple expands its product portfolio, it will move away from this rather bizarre pattern and give us some new model/models also in the Spring to even out its iPhone business per quarter rather than having that sales spike once per year). So we already see looking from Kantar numbers comparing this ended period to Kantar numbers from Q1 (ending March) that iPhone sales are down - that is normal pattern no reason to panic - but also Windows Phone ie Microsoft Lumia is down. That means what, it means Android sales are up (Kantar reports by market share and only by OS).

So its a good time to be an Android maker right now. And what about their big dog, Samsung? Samsung stumbled badly with the redesign of the flagship Galaxy S6. While it was smart to move away from the plasticky materials that seemed cheap compared to the rivals, Samsung in some silly management brain-fart decided to abandon several competitive advantages the Galaxy series had held over the iPhone for many years. The Galaxy S5 was waterproof (the S6 is not), the S5 had a removable microSD slot that allows users to instantly swap memory including videos and pictures etc both for themselves and between other smartphones the user has, and swap content between other users (except not iPhones). And suddenly the S6 doesn't have a microSD slot. And finally, the S5 had a removable battery, the S6 doesn't. Again this is no big deal in the most advanced economies where electricity supply is always reliable (and this is where most iPhones are sold), but much of Samsung's global market is in the Emerging World where electrical supply is not reliable and a removable battery is a great sales advantage. Samsung voluntarily threw away three competitive advantages, while changing the casing materials for the Galaxy S6. Why? What sense was there in that? These were not mutually exclusive, Samsung could have made good materials and good-looking Galaxy S6 class - WITH waterproofing, microSD support and removable battery. To add to its arsenal a better build material while keeping those competitive advantages loyal Galaxy buyers have come to belove and to expect. 

I predicted when the Galaxy S6 (and Edge) were released that their sales would disappoint. It would still sell well but this was not good enough to recapture growth to Samsung. They would yes remain as the biggest smartphone maker, but voluntarily abandoning several competitive advantages was a stupid move that would hurt Samsung. And I said the biggest wins would go to those brands that had a flagship closest to the Galaxy class, but which had those features. The LG G4 has the removable battery and microSD slot (but not waterproof). The LG is sold worldwide, it would take some of that lost business and LG should be seeing a nice surge of those Android users coming to buy the G4. And the other winner? The Sony Xperia Z4 which didn't do the removable battery but did do the waterproofing and the microSD slot. While Sony doesn't sell in all markets anymore it should still see a healthy rise in its business, and I went so far as to promise that on the published specs of the Sony Xperia Z4, it would get to rule as the best Android smartphone of the whole pack, and I urged Sony to rush the Z4 to the market fast.

Some rushed to this blog and on Twitter argued with me that waterproofing, microSD and removable battery don't matter. That the Galaxy S6 and Edge are so beautiful, they will bring huge sales to Samsung. I said maybe, I stand by my prediction. Now we are seeing the early evidence. There are reports that Galaxy sales to the channel have been strong but sales to end-users have been weak. So the love of the shiny new object has indeed produced shipments from Samsung to the store, but in the store we see consumers trying out rival phones and the new Galaxy is suffering. Very fresh reporting from South Korea says that Samsung has reduced Galaxy production by 16% (one sixth!) because demand is so soft and the channel has so much unsold inventory. The growing consensus among Samsung-watchers is that the new Galaxy S6 has not reignited a huge boom for Samsung in ways that past S4 and older Galaxies did and rather the S6 now seems destined to be a disappointment flagship like the Galaxy S5.

THE ONCE-IN-A-LIFETIME OPPORTUNITY FOR XPERIA

Thats your competition Sony. Stumbling. On a self-induced error. And you, with your Xperia Z4 have the best rival to steal business from loyal Galaxy owners, to take business from the biggest Android manufacturer and capture new top-end customers. Especially those who loved the waterproofing of the Galaxy S5 and also those who want a microSD slot. By its looks, the Xperia has always had a distinctive stylish appeal so on that side Sony isn't suffering ether. The management has been quite happy with how well the Xperia Z3 has sold and briefly the loss-making handset unit even reported a profit one quarter powered by the Z3.

And the world awaits for the beautiful, top-spec flagship from Sony the Xperia Z4. It was shown to the world a few weeks ago and sales have already started in Japan. It is in reality only mild evolution from where the Z3 was but its the true top-dog smartphone and the Z4 has been receiving tech reviews calling it the best of the Android flagships. For example PCAdvisor called it a close race between the S6 and Zr but called the Z4 ow the better smartphone. The Z4 Tablet also has been rated very favorably against the latest iPad such as at Tech Times. This is what Sony had been waiting for. For once the big giant is down on its knees and the Xperia stands alone. The Z4 specifically. This is Sony's moment. Its Razr Moment when iPhone sales are in their regular annual decline period, Samsung inexplicably shot itself in the foot, and the Z4 had just hit that sweet spot, it is receiving excellent tech reviews. Now just get it to the market and sell it everywhere possible and work on the distribution (and rake in the money).

The Sony Xperia Z4 has been shown to the world. It. Yes the Sony Xperia Z4 has also already been launched and is now selling in Japan. And we, the rest of the world, were supposed to get our Xperia Z4 now in the summer. What did Sony do?

Pinheads! They rebranded it. Rebranded their flagship? Now? AFTER THE MARKETING WAS DONE? After reviewers have been raving about the Z4? Yes. Did they rebrand it into something awesome like Xperia Z5 or Xperia Playstation or Xperia Z10 (haha Microsoft Windows 8 going to Windows 10). No. Some Sony nincompoop decided to call the new global flagship something 'less than the Z4'. So they announce the Z4, then Sony give the specs of the Z4, then they launch the Z4 in Japan, but the rest of the world get... the Xperia Z3+.  The Z Three Plus. What the fuck!

You don't go BACKWARDS in your flagship numbering! Not if you want to get any market SUCCESS. Even a first-year graduate at Tokyo University knows this. When Nissan - you in Japan recognize Nissan a big Japanese car manufacturer? - when NIssan decided to give the world the newest supercar to replace the 350Z, it called it the Nissan 370Z. Bigger number equals better in this kind of marketing. I know you in Japan don't know the car by that name, In Japan its the Fairlady Z, so yes, same thing - EXACTLY the same thing, Fairlady Z33 (to us in the West known as Nissan 350Z) was updated it was called the Fairlady Z34 (aka Nissan 370Z).. If you announce the Nissan Fairlady Z34 (Nissan 370Z), then have Top Gear type TV shows test-drive the Fairlady Z34 (NIssan 370Z) and then actually sell us the Fairlady Z33 Plus (the Nissan 350Z plus) nobody is going to rush to buy that 'minor upgrade' to the past product! Instead they will WAIT for that promised awesome new Z34.

What kind of lunacy is this? Lets take another example for our marketing-challenged Japanese readers. Listen carefully. Lets take Nikon, the icon of professional cameras and one that - haha - uses Sony sensors in most of its DSLR cameras. Nikon. Its flagship professional camera line. What did they do with its branding and numbers? The Nikon D1 was their first professional DSLR camera in 1999. That series was replaced by the what? The D2 series, the D2H came out in 2003. And then Nikon replaced that line of top-of-the-line DSLR cameras with what? the D3 in 2007. And what was the line that came next? If you know how to count in Japan, you know the answer. The Nikon D4 released in 2012. Its latest iteration is the D4S which is the current top line.

In all other companies the math goes like this 1, 2, 3, 4, 5. In Sony Xperia division the math goes like htis instead Z1, Z2, Z3, Z4, Z3plus. WHAT IS WRONG WITH YOU!!! When BMW release their newest top car they call it the 7 series, not the 5 Series Plus!. 

The phone is the same! What the world was shown as the Xperia Z4 is now to the rest of the world only the Z3 Plus. All the marketing was done to convince the world to want the Z4. Now we only are given a Z3 Plus instead. What is wrong with Sony? Do they WANT their sales to fail? This was their Razr Moment. Some who own a Z3 have been waiting eagerly to buy a Z4. Some Samsung owners who were disappointed with the Galaxy S6 were told that wait a few weeks, the brand new Sony Xperia Z4 is coming. Now they will be offered a Z3plus instead. Nobody with a Z3 will bother to buy the 'modest upgrade' Z3plus and will rather WAIT for - yes - the 'real' Z4 that will come some time much later when this exceptional moment for Sony corporation is long gone. And any owners of Xperia Z2s (or Z1s) will also see, this new box is the Z3plus - I already saw the Z3 last year and decided not to buy it, I will WAIT for the Z4.

This is OSBORNING your current product line but even worse than Osborne, this is without a newer/better product even to be shown. There is ZERO redeeming qualities to this marketing blunder. No good outcome from breaking with the successful Xperia Z1 Z2 Z3 Z4 branding to now rebrand the Z4 - after it has been marketed and sold - as the Z3plus. This will not increase Z3plus sales over what Z4 could have had. It will not help in ANY instance to rebrand a BMW 7 Series as a 5 Series Plus. Some can see past it, and for some it won't matter. Others are not like that, and will think a Z3plus is an inferior product and only a mild upgrade from the Z3 - and they will not buy the Z3plus. They will wait for the Z4 or Z5 or whatever might be on offer six months or a year later. By then this opportunity of a mis-designed Galaxy S6 will be long gone and Sony's Razr Moment will be gone,

So was this smart? Was this clever? Or is this a marketing disaster even elementary marketing students can see is a blunder! The marketing boss who authorized this should resign in disgrace! Offer the resgnation today and the CEO of Sony you have to accept that resignation! I am saying this with my greatest, deepest, gravest respect of all that Japan has given the mobile industry, and the long history of excellence Sony has brought to mobile phones for several decades - and as a proud user of numerous Sony flagship products over the years including many of your top phones. I love Sony but Sony listen. This is embarrassing Sony Corportation. You are losing face! You are now a laughing stock! You are a case study in stupidity in marketing!

I first say this in phonetic Japanese, this is my message to Sony corporation after this the biggest marketing blunder of 2015 (via Google Translate):

Anata wa, anata no kaisha, sono eikō no rekishi to sono hokori isan o hazukashī sa rete imasu. Anata wa, sonī no na ni haji o motarasu to chūjitsuna sonī no kokyaku no mae de kao o ushinatte imasu. Hajiwoshire!

I also provide it in Japanese characters (I apologize for bad grammar, it is Google translate, you get my point):

あなたは、あなたの会社、その栄光の歴史とその誇り遺産を恥ずかしいされています。あなたは、ソニーの名に恥をもたらすと忠実なソニーの顧客の前で顔を失っています。恥を知れ！

And the English translation;

You are embarrassing your company, its glorious history and its proud legacy. You are bringing shame to the Sony name and losing face in front of loyal Sony customers. Shame on you!

I am appalled and disgusted and cannot understand how anyone at Sony could have approved this obvious amateurish basic marketing mistake. And it is even worse right now, as Sony is firing over 1,000 people in its handset division, so there is severe turmoil right now. What the handset division needs is stability. It is the ABSOLUTE wrong TIME to play silly rebranding games which deplete scarce marketing resources now, in a totally unnecessary (and counter-productive) change. You are fools at Sony! I am ashamed of you as a 'leader' of this industry and if this is how Sony management intends to fight in the smarttphone wars, you fell out of the Top 10, you have no place in coming back to the Top 10 if such idiots are allowed to run the handset business. 

Sony CEO Kazuo Hirai-san fire that moron who made this decision to rebrand the already-marketed, already-sold Xperia Z4 as the inferior-sounding Xperia Z3plus. If that is Mike Fasulo or Hiroki Totoki or whoever it was, someone has to be fired for this. You are now a laughing stock in the tech industry. This is elementary level mistake. This is an error so grave, Stephen Elop of Nokia would make this type of errors DELIBERATELY to destroy handset sales (so he could collect his bonus)

Comments

[Winter]

@chithanh
Boron95 still lives in the Job reality distortion field where Apple destroued all enemies and conquered everything that matters

[Paul I]

Actually, the dumb moves (a.k.a getting iSheep flu) of Sony and Samsung make the whole phone arena much more fun to watch! Otherwise it would be a very boring phone arena to watch (i.e. "farming" phase as Tomi has called it). Probably the main beneficiaries here will be the Chineese phone manufactures which get Android for free and ironically this goes against Google (e.g. no Google services in China and therefore no advertising income; Google's services on Android get replaced on Android by third Bing/Baidu/Yandex search engines => fun to watch).

[Winter]

@Boron95
"Apple and Samsung had already cornered the supply chain for capacitive touch screens and flash memory. Nokia only had access to second rate application processors."

Nokia sold more than 10 million Lumina handsets in the first year (2012) and 30 million in the second.

http://en.wikipedia.org/wiki/Microsoft_Lumia

And as written before, Nokia had to write off large inventories due to a lack of demand.

So, please, give us some evidence of your claim that they were constrained by supplies.

[AtTheBottomOfTheHilton]

We can speculate about the opposite, if Sony decided to keep the Z4 name. Then the reviews would have been like, "not a worthy successor", "no need to upgrade" or "it's basically a Z3".

The truth is that this is not entirely the fault of Sony but also Qualcomm. As we all know today, the Snapdragon 810 is a turkey has a lot of troubles with heat and when the throttling kicks in it's not faster than it's predecessor. They are also keeping the same camera and don't bump the screen resolution.

In my view Sony tries to be honest with the naming.

[chithanh]

@Baron95
> Nokia in early 2011 had no cash and little ability to borrow to finance a reorientation of its business away from Symbian into a new ecosystem.

Um, what? Nokia had an almost perfect credit rating in early 2011, and it got immediately downgraded after they moved to WP. Plus they somehow had the money to buy out Siemens from NSN.

CDMA was like 10% of the mobile market back then, and mostly confined to the U.S. where Nokia wasn't that big anyway.

And that you need billion of dollars to produce Android handsets is a ridiculous claim. Chinese white-box manufacturers do it with much less money to start with. And they have no problems acquiring Qualcomm chips. Even producing WP devices can't be that hard, considering the HTC M9 for Windows is basically an Android phone with minimal modifications.

[zlutor]

@chithanh: I do not know whether baron95 is right or not in this case - I think he is not - but your statement ("Plus they somehow had the money to buy out Siemens from NSN.") has no any connection with situation in 2011. It happened years later, actually largely "paid" by Microsoft: http://www.zdnet.com/article/nokia-turns-to-microsofts-eur1-5bn-buyout-loan-to-pay-for-nsn/

In 2011-2012 Nokia had - despite huge losses largely generated by our most beloved Nokia CEO ever - billion of cash: http://in.reuters.com/article/2012/07/19/us-nokia-idUSBRE86I0F620120719

So, I think, they could finance Android path, too. Of course, getting billion from M$ was not a bad thing but I think they would pay some money even if Nokia does not accept exclusivity. It was big, really BIG back then and anybody would be happy to cooperate with them - including Qualcomm and Google, I guess (Samsung was already long lasting partner then).

@baron995: your comment about such bad Nokia-Qualcomm relationship was really interesting. Any fact/links?
I have made quick googling and it seems to be the opposite:
e.g.
https://www.qualcomm.com/news/releases/2008/07/23/nokia-and-qualcomm-enter-new-agreement
http://www.forbes.com/2009/04/21/nokia-qualcomm-mobile-technology-wireless-nokia.html
http://www.insiteo.com/joomla/index.php/en/our-news/192-partnership-between-nokia-here-and-qualcomm-atheros-a-boost-for-indoor-location

@Tomi: how do you see this? Was it a real issue?

[Huber]

@Baron95:

"Sony is done in phones. Calling it Z3+ is not going to be the reason for their collapse. The reason is that no one cares to buy a Sony phone that is indistinguishable from the hordes of Android phones."

This is not correct: Sony's devices are good. I own the Z2 Tablet It is a gorgeous device with good build quality, it is fast and open. The phones have a good UI, good cameras and SD card support. Sony's compact phones have the same hardware than their bigger brothers, unlike e.g. Samsung, where the compacts have cheaper hardware.

The problem with Sony is that their marketing is incredibly bad: Important sites like Anandtech don't get parts for review, and you hardly see them at retailers.

Last week I was at Media Markt (a big German retailer). 80-90% of the available space was filled with Apple and Samsung tablets and phones. Additionally, they had a single Sony device (Z3), a single LG device (G3), a single HTC device (One M9) and a few Huawei phones.
Add to this a bunch of sub-€100 noname tablets, and that's it.

So customers who shop around hardly see any Sony devices. You explicitly have to search for a device with certain specs which are not met by Apple and Samsung. Otherwise the sales guy will sell you Samsung or Apple.

This is the erason why Sony is in troubles despite technically getting most things right. It is a shame, really.

[Catriona]

@Tomi, Elisa Pay sounds very low tech to me. Without a PIN or a fingerprint scan, and by sending receipts via SMS, it seems extremely unsecure. Anyway, the carriers here in the U.S. had "Isis Wallet" (since renamed Softcard, and now part of Google Wallet, soon to be Android Pay) in 2012. We all agree NFC payments aren't anything new, but what makes Apple Pay and Android Pay somewhat more appealing than traditional NFC payments is the additional security.

[Spawn]

@chithanh

> The Qualcomm hardware that Windows Phone runs on is also suitable for Android

The N9, and its brother the N950, also did run Android.
http://talk.maemo.org/showthread.php?t=90646
Nitdroid, done by only some people in there free time without all the resources Nokia had.

Sailfish OS, based on Meego, even integrated Android as runtime going a step future. Also with very limited resources compared to what Nokia had.

@Paul I

> no Google services in China and therefore no advertising income

Most such devices ship Chrome which is Google's advertise-window. Claiming no advertising income is certainly as wrong as claiming Google not makes mkney on Windows-users.

The real problem is the lack of service lockin. No gmail, probably no google search, no gmaps and gdata, etc. Such users are not bound into the google ecosystem, they have choice and they are hard to track, profile and fill databases about. No data, no oil. A huge chunk of people who neither facebook or google (and by logical extend the NSA) has detailed informations about.

> Bing

Bind is dead. Get used to it.

@Tomi T Ahonen

> And they want me to register my phone number or upgrade?

Yeah, they need more data, more oil. Connecting creditcard, phonenumbner, everything to your profile.
Suggestion: switch to another service. You have the choice to not let them pass with that :-)

[Spawn]

@Catriona

> fingerprint [...] additional security

"fingerprint biometrics is unsuitable as access control method and should be avoided"

http://www.ccc.de/en/updates/2013/ccc-breaks-apple-touchid

[Paul I]

@Spawn

>> no Google services in China and therefore no advertising income
>
> Most such devices ship Chrome which is Google's advertise-window.

Yes, but that Chrome will have also Baidu as search engine (and probably all the code lines which helps Google to get user data commented out). Therefore how Google pushes advertise? It can't.

The future belongs to Android but an Android where Google will be removed little by little out by different forces (e.g. China, Microsoft, Samsung, etc.). Even Samsung dreams about an Android where Google services are replaced by Samsung services. That battle of the future is getting Google services (and Google also) out of Android. This will be done removing screw by screw. Of course Google Play Store will be tough to replace but this is not impossible if a lot of money are put in marketing.

> Claiming no advertising income is certainly as wrong as claiming
> Google not makes mkney on Windows-users.

Google makes money from Windows-users!!! All the those Windows users which use Google as search engine on their Windows computers!

You got really wrong this one! ;-)

[Catriona]

@Spawn, a fingerprint ID may not be the most secure, but it's more secure than no user authentication whatsoever.

[Paul I]

Again fake Tomi strikes?

[chithanh]

@zlutor
I guess you are right and I was wrong about the NSN loan.
Still as you pointed out, Nokia had considerable cash reserves at the beginning of 2011. This is stated in their financial report.

@Spawn
Yep. Android runs on anything and everything. Getting components that run Android is very easy, and hobbyists manage to port it even to devices that were never meant to run Android in the first place.
Compare that to Windows, it is always newsworthy when Microsoft ports Windows to a new platform because that happens not so often...

@the fake Tomi
You have some nerve coming to someone else's blog and posting an ultimatum.

If you think your or someone else's predictions are better than Tomi's, or have evidence of wrongdoing, feel free to post that on your own blog. Maybe you will get the attention you deserve.

[Spawn]

@Paul I

> Therefore how Google pushes advertise? It can't.

Oh, it can. Google Ads and Analytics are everywhere far beyond there own search & service landscape. But they are, if way lesser data about the product (you and me, everybody not using there services) is available, not tailor ads in the same way they can with others. That undermines the value each ad has if we are target) and that takes away profits. There are ads but this are lesser worth.

> That battle of the future is getting Google services (and Google also) out of Android.

Agreed.

@Catriona

> a fingerprint ID may not be the most secure, but it's more secure than no user authentication whatsoever.

Elisa Wallet uses certificates and pin according to the sources I found. I am not sure where Tomi got that they are not using pins? Also fingerprint-authorization is NOT an app-feature but thats done by the OS and if its used it really shouldn't be) then all apps can use it, transparently.

The proper way is anyways an external device that includes pki and youhave-verification like was the case pre 2005 yes, that old) already. Ingegration all that into a mlbike is a very bad idea from security perspective. But hey, just like banks and creditcard-companies us techies are fine to give customers shot-in-the-feed tools if profit matches.

[Paul I]

@spawn

>> Therefore how Google pushes advertise? It can't.
>
>Oh, it can. Google Ads and Analytics are everywhere far beyond
> there own search & service landscape. But they are, if way
> lesser data about the product (you and me, everybody not
> using there services) is available, not tailor ads in the
> same way they can with others. That undermines the value
> each ad has if we are target) and that takes away
> profits. There are ads but this are lesser worth.

True but as you just wrote is waaaayyyy lesser service.

[Paul]

@Fake Tomi

Please, do us all a favor and post under a different name than Tomi T Ahonen!

I do not give a flying f... what has happened or what is happening there but do not be a pussy and stop pretending being Tomi T Ahonen!

[Paul]

@Paron95

It looks you are trying hard here to re-write the history going on and on again and again! You justify now Nokia's mistakes now thru its final failure in mobile phones, which is called also affirming "the consequent". Basically this is an incorrect logic! Google for "affirming the consequent" to see what I mean.

Here is a challenge for you! Try to make some predictions (about future of course and mobile phones)!

[Winter]

@Baron
"You guys are trying to re-write history."

Evidence, my dear Watson, evidence.

Give us evidence.

[zlutor]

@baron95: you are right, I really have no experience with procurement stuff - that's why I wrote "I GUESS"...
On the other hand Nokia had more than 1bn back then, isn't it?

Anyway, that time has passed. But I hope we will see the return when they do it better. Or not... :D