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Actually, their smartphone line-up got way better last year. Xperia U is a fantastic mid-end device. They just need to improve their high-end devices, since they don't really stand out against the competition (GS3, iPhone, One X, Nexus 4).

If the rumoured device with 1080p screen is real, they'll have a shot at the tops. But their mid-end line is doing fine now.