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Sony Unveils Flagship Phone Despite Mobile Struggles

Image: Sony's new Xperia Z4 smartphones are displayed at the company headquarters in Tokyo

Sony's new Xperia Z4 smartphones are displayed at the company headquarters in Tokyo on April 20. Sony Corp on Monday unveiled the new high-end Xperia handset featuring an aluminium frame and a 5.2-inch screen, showing it is still in the smartphone race even as it scales down its struggling mobile operations. TORU HANAI / Reuters

Sony has unveiled a high-end flagship smartphone, marking a commitment to its mobile division despite scaling back operations in the struggling business.

The 5.2-inch Xperia Z4 comes after the company confirmed thousands of job cuts in its mobile division earlier this year. It also said it would reduce the number of smartphone models it would release in an effort to boost profits.

Question marks have been raised over the future of Sony's smartphone business amid the Japanese giant's massive restructuring project, which has seen its personal computer arm and TV division being spun off.

In September, CEO Kazuo Hirai insisted to CNBC that Sony needed to remain in the smartphone business. However, at a briefing earlier this year, the company head said he would "not rule out considering an exit strategy" from the smartphone business.

Sony unveils Xperia Z4 0:32

This would have significant implications for the company, with analysts highlighting that such a move would see Sony lose a large part of its consumer-facing side of the brand.

The Xperia Z4 looks very similar to the previous Z3 model, but has an aluminium case. It has the same 20.7-megapixel rear-facing camera and comes in four different colours. Like many smartphone players, Sony is finding it difficult to differentiate on design, analysts said.

The phone will be available in Japan in the middle of the year, but Sony gave no further details on price, worldwide availability or a specific launch date. The company's mobile unit brought in 9.3 billion yen ($78 million) in operating income in the third quarter of 2014 -- making it one of the company's smallest units by that metric.

The latest device pits the Japanese electronics giant against rivals Apple and Samsung, following the latter's release of its Galaxy S6 and S6 Edge smartphones. The high end of the market is dominated by these two players, while the mid-to-low end has seen the likes of Xiaomi become a major player. To date, Sony has been unable to get a solid foothold in any one of these segments.

In an effort to combat this, Sony released a mid-range smartphone called the Xperia M4 Aqua at Mobile World Congress in March, as an increasing number of consumers seek high-spec devices at lower price points.

With the Z4, Analysts said Sony was focusing on retaining its existing mobile customers.

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"Sony appears to be focusing more on keeping the customers it already has versus trying to capture new customers," Ben Wood, chief of research at CCS Insight told CNBC by email.

"The Z4 will tick the boxes for customers that previously owned a Z-series device, but will be a tough sell to new customers given the dominance of the Apple iPhone and attractive new devices from Samsung, supported by an eye-watering marketing spend."