Sony's (SNE) Xperia Z was probably the biggest surprise hit of February. It sold out substantial early shipments from Japan to France and is currently dominating the U.K. smartphone market outside the Apple (AAPL) – Samsung (005930) axis. This has been a very painful experience for HTC (2498). The launch of the new flagship HTC One was recently delayed until the end of March and it looks like April shipment volumes are going to be very thin, most likely due to camera module sourcing problems. Wasting no time, Sony is now rolling out its cheaper Xperia models at lower than expected price points. The Xperia SP will launch in some European countries below 400 euros and the Xperia L will debut below 300 euros in Netherlands and Italy.
It's the pricing of the Xperia L that is raising eyebrows in Europe this week. The brand new HTC One SV budget smartphone is still retailing at 320 euros and above in Germany. A comparison of the Xperia L and the HTC One SV shows two models close to each other in specifications. Both devices feature a 4.3-inch display with pixel densities of roughly 220 ppi. Both offer 8GB of internal memory. The main differences are that the HTC has a more powerful chip (1.2 GHz vs. 1.0 GHz) and the Sony model has a better camera (8 megapixels vs. 5 megapixels).
Sony has retail momentum due to the Xperia Z's success. The Z can now pull the aggressively priced budget Xperia models into its slipstream while HTC struggles to ramp up One production volumes. By pricing the Xperia L below the equivalent HTC model, Sony can slam its Android rival in the budget category while HTC reels.