Sony Ericsson: Introduction
Sony Ericsson is a global manufacturer and distributor of mobile multimedia devices which includes phones having rich features, mobile accessories and PC cards. Products are innovative blend of powerful technology with communications, imaging, music, and entertainment applications. As a net result, Sony Ericsson is serving market with enticing brand that provides end users desirable fun products. Sony Ericsson was established by telecom leader Ericsson and consumer electronics giant Sony Corporation in 2001. It ownership is equally owned by Ericsson and Sony. Its first product came in market in 2002. Its products have universal consumer appeal. They are different in areas of music, imaging and applications. Company has developed products with advanced technologies such as 2G and 3G platforms. Product research & development, design, manufacturing, marketing and customer services are major undertakings by Sony Ericsson. Its global management is headquartered in London while R & D is in U.K, France, Sweden, India, Japan, China and United States. The Firm has around 3,500 around the globe.
Sony Ericsson is accepted as leader in mobile designs and innovations. Its many products won awards like T 610, K750i as best 3G handset for 2004. GSM Association awarded K800 Cyber-shot phone as best 3GSM in February 2007.
Sony Ericsson has built many partnerships for continuous innovative products development. Partnership with Sony BMG is a way for bringing best and innovative content to its customers. In gaming applications, Sony Ericsson took the lead in launching first Java 3D-enabled handsets, and is looking forward to bring 3D gaming to a wider segment of mobile users.
Background of Sony-Ericsson
Ever since the Japanese electronics company Sony and the Swedish telecom giant Ericsson came together to form Sony Ericsson, big things were expected in terms of technologically advanced wireless phones as well as improved sales and market shares. However, the first year passed with a lot of disappointment. Sony Ericsson's already low market shares began to drop rapidly and the company was losing money. On the other hand, the much anticipated Sony Ericsson T68i phone was introduced and was a major hit. It was the first GSM/GPRS (global system for mobile communications/general packet radio service) color screen handset. Its Bluetooth technology was also the first of its kind, allowing wireless connections to headsets and PC synchronization. One of the accessories included a snap-on digital camera, which has become quite popular and a must for all new models. In the past year, Sony Ericsson has seen a revival in the company as they continue to introduce new revolutionary devices such as the P800 and T610 and set new standards. All this success has contributed to an increase in market shares and has pushed them back into the top five in cell phone manufacturers. In order to continue this success, a new IMC plan is needed.
Creativity and flexibility is required in order to succeed in the mobile-phone industry. No other industry changes faster, or experiences more sudden and rapid changes to fortunes. The industry was shaken by the alliance of two consumer electronic giants in October 2001, Sony and Ericsson. Sony Ericsson mobile communications is a fifty-fifty joint venture between Japan's Sony Corp. and Sweden's Ericsson AB. With headquarters located in London, Sony Ericsson became the sixth largest global mobile phone corporation in 2005 following closely behind competitor Nokia. Motivations for the joint venture alliance as well alternatives to a joint venture will be explored, concluding with an examination of the problems and strategies used throughout the alliance to aid Sony Ericsson to become a world renowned mobile supplier.
Even with the global clout of SONY in consumer electronics (particularly music and video) and the proven R & D strengths of Ericsson, SEMC must contend for a fair share of dynamic mobile telephony markets worldwide against giants like Nokia of Finland and Motorola of America, as well as recent entrants such as Huawei of China, LG and Samsung of South Korea. One solution SEMC has latched on to is moving forward the goal of becoming a supremely “attractive and innovative global brand in the mobile handset industry” (Sony Ericsson, 2007a).Given the nature of competition in the mobile handset industry, such a goal has required SEMC to invest in very prominent advertising presence and to maintain a rapid flow of new designs from electronics, application development and design laboratories now dispersed throughout Sweden, the UK, the Netherlands, France, Japan, China, India and America.. To this end, SEMC has declared its intent to be present in across the board, with offerings at the high-end, mid-market and entry-level segments. Depending on the market situation, the company has matched rival entries or pioneered unique imaging, music, design and applications solutions. While keeping an eye on developments in mobile communications technologies, the SEMC focus is on the Europe-originated Global Standard for Mobile (GSM) telecommunications, and on innovating across 2G and 3G platforms. Naturally, the drive to be more competitive vis-à-vis industry leader Nokia has called for branding with universal appeal (Sony Ericsson, 2007b). For example, the campaign launched two years ago to replace the universally recognized heart symbol with the SEMC logo in many contexts of consumer lifestyle required consumer acceptance testing not only among Britons and Europeans but also in the burgeoning markets of North America, India and East Asia. This marketing paper will focus on the U.K., home market of SEMC.
Complementary asset sharing and knowledge transfers were among several reasons motivating the alliance. Ericsson was heavily criticized in the past for poor manufacturing capabilities as Ericsson previously outsourced its production procedures to Flextronics in order to reduce costs (Electronic Times, 2001). Alongside that, Ericsson was associated with poor designs in terms of aesthetics and was unable to attract a large pool of consumers especially teenagers and young adults. Furthermore, due to the ever changing industrial environment of the mobile-phone industry, Ericsson was forced behind due to its inability to keep up-to-date with the market and as a consequent, slowly loosing its already minimal market share.
Ericsson was buying chips from a single source, a Philips plant in New Mexico. Nokia was also buying chips from same facility. In March 2000, a fire at this facility contaminated the facility. Philips gave assurance to Ericsson and Nokia that production will start again just a week time. But it did not happen. Nokia purchased chips from other sources. So Ericsson faced serious shortages. This reduced Sony Ericsson's competitive ability to introduce new phones and maintaining supply of current phones. Sony Ericsson, after its new identity introduced first phone in 2002 and now has a product portfolio for meeting demands of all consumer target groups. In 2005, Sony Ericsson introduced the Walkman W series music phones (fourteen models to date: W200, W300, W550, W600, W610, W700, W710, W800, W810, W830, W850, W880, W900 and W950)
The Sony Ericsson Product Range
In broad terms, the SEMC product line spans handsets, accessories, broadband solutions, networking systems for businesses, and value-added applications (Sony Ericsson, 2007d). As a handset provider, SEMC also makes available downloads in the form of interface graphics, music, video, enhancements and upgrades that work only on Sony Ericsson units, of course. With an eye to image, market franchise and public relations impact, the company styles itself a global provider of multimedia rich devices, including feature-rich phones, mobile accessories and PC cards. An enticing brand that creates compelling business opportunities for mobile operators and desirable, fun products for end users (Sony Ericsson, 2007a). In common with other players in the industry, SEMC products are showcases of technological innovation, leading-edge mobile imaging, music, communications and entertainment. The mobile telephony market is driven less by functionality than by technological advances and design trends. Across the board, SEMC therefore applies total quality management in imposing design mandates in the spheres of feature selection and packaging, user-friendly applications, breakthrough materials and visual appeal. For the company affirms that “design is the essential differentiator when comparing mobile communications products.” At the Creative Design Centre studios in Lund (Sweden), London, the USA, Asia and Japan, product development teams combine the skills and perspectives of industrial designers, human interface designers, color and material designers and graphic designers. This ensures that usability, aesthetic appeal, and logical menu structures count for as much as innovation for its own sake. Evidently, product designers also have to consider competitive innovations (witness the design knock-off's that followed the successful launch of the Apple iPhone in July 2007). As well, they are tasked to be outward-looking, keeping a vigilant eye on fashion, market and consumer trends (Sony Ericsson, 2007c). Such aesthetics, as well as competitive pressures, are evident in the following examples of accessories that enhance customer experience whilst boosting financial results.
Branding Key to Sony Ericsson Growth Plan
The difference in mid-end hand sets and top-end models is reducing because of technology advancements in mobile phone handset accessories market. Increasing liberalized regional telecommunications is boosting cellular subscriptions and a high disposable income labor force, the Middle East has become a lucrative market for handset manufacturers such as Sony Ericsson. The company has been successful in this emerging market due to successfully fusing innovative technology to develop products. Sony and Ericsson's combination of core competencies is a competitive edge of Sony Ericsson.
Digital cameras and MP3 players have now become essential features of handsets, Sony Ericsson handsets like Cyber shot and Walkman handset ranges are a direct attempt to tap the Sony's heritage in both markets respectively. Sony Ericsson supports retailers and resellers by advertising and marketing campaigns.
Sony Ericsson has announced fusion of entertainment and communication for their customers as their new brand strategy. They are adopting a new brand message in collaboration with Sony Group, “make. Believe”. It will use seven colors in its logo as part of its rebranding strategy. They will involve consumers at a greater extent in their branding process. They plan to do this by focusing on their interactive digital and social media efforts to communicate with their target consumers.
Sony Ericsson connects on the web
Winning new mobile customers is becoming easy by digital marketing. Two major brands - one big company. Combining a Swedish company, Ericsson with one from Japan, Sony, it shares a design and communications history with history of marketing expertise and gaming, music and entertainment content on the other. Both have invested millions in this venture. The company had a slow start but it got the momentum in 2004. According to Superbrands, Sony Ericsson is among coolest brands in the UK. But in some previous years, it has been facing losses due global slow down and intense competition. Digital has played a good role in its growth. The digital budget is around 15 %. For some sets, it can go up to 30%. The early technology adopters are usually looking online for making their choices. So web is a great leap of imagination. The sector and market segment are worthwhile for its adaptation.
It is a sustainable part of Sony Ericsson's marketing mix and it will continue its evolution in future. The investment is easier to make, getting feedback from consumers is easy. The people in technology now are much more sophisticated than past. Technology is enabling in work and general living. By giving brand experience online, Sony Ericsson provides consumers tangibility and technology, both with explanation of the product. Now the decision making is more dependent on online sources. Marketing mobile phone is quite different from marketing other products. Networks form direct relationship with customer. Sony Ericson does not do this one-to-one connection. Sony Ericsson's branding should not have impact only on consumers but also on retailers and its distributors. Mobile up gradation is more frequently than cars, so they have limited shelf life. This should be considered in any campaign.
Digital marketing has solution to tackle such problems. In digital marketing, contact with customer is direct. Sony Ericsson is working closely with networks. They are mindful about direct customers as well. SE works with them to ensure that they do not market product too quickly. Sony Ericsson has been working with Dare for launching its handsets in US. Sony Ericsson has always recognized important role played by digital channels.
To reduce these channels, Sony Ericsson uses a micro site for promotion of each mobile set, providing a brand experience, with having link with corporate site (www.sonyericsson.com). Corporate hub offers more details about handsets. Sonyericsson.com. is managed by Toon Diependaele, who is director of digital marketing at Sony Ericsson. Sony Ericsson has emphasis on building a global framework with having room for local implementation. It has to [provide wealth of information in 63 country areas with 30 of its main products at any one time. The user benefits are explained in non-technical way for the understanding of the common man. It is about how phone will help you in making your life easier. It can also be about benefits due to some new feature like use of MMS in T610. Design and creativity go side by side in online marketing. The product tells the idea. For example, S700 has the idea of picture quality. So its performance and functionality is the basis of the idea.
The faith in digital marketing is natural for an organization founded 2001 and who is in business of selling E mobile phone. This is a digital age. And Sony Ericsson recognizes this fact in every way of its functions. Even in its logo which is dynamic. The development in this industry is at a surprising speed. So to meet the demands of changing consumer tastes, the products are dynamic too. For T610 camera phone is very popular phone, but new products in the same category have been introduced recently. Sony Ericson has become pioneer in use two sided online banners for pushing its new handsets.
New generation of camera phones are following dual front strategy. They can be handled horizontally. Quickshare of pictures taken by the camera make these handsets easy to use for picture messaging. Quickshare is one way of sharing of pictures common in all Sony Ericsson mobiles through Bluetooth. Themes are extended from functionality of the handset. The K500i is based on idea that technology should save the time. For a handset with gaming, picture capability and MP3 playback will use broader theme. Users can also give suggestions on website.
Sony Ericsson had an exhibition on its site, featuring picture taken by K700 by celebrities. The exhibition was also shown at an art gallery. Website is considered hub of all the activities. It helps in building positive brand image through its website. Website gives opportunity to Sony Ericsson to expand life span of its products online. This theme is should continue in future as well. Sony Ericsson is doing things differently with its online marketing. It also used iTV channel when the opportunity came on the way. The idea of advertising was very strong, although it presents a problem in production cost and accountability. Networks are usually involved in the process selling. So, coordination between Sony Ericsson and networks needs to be increased to sell. The online marketing campaigns create desire in customers. Different approach is used for different segments of the market. When dealing with smart phones, the approach has to be entirely different from a product that is at entry level. Content such as free ringtones and java games are diving factors for the sale. It is also suggested that Sony Ericsson should be picture massaging. Sony Ericsson ha s realization that imaging trend is going to continue.
About 95% percent of the mobile phones purchased in last years data shows that they were picture enabled. After much taking has been done about gaming, music phones are area where improvement is needed for better services. Music has appeal to all people; they might have different tastes in music. The ringtones are built by ensuring quality.
3G is now more talked about technology and a lot of opportunity in this segment. We need to rely on networks, but nothing has been revealed. No medium will be required for this purpose. The marketing efforts of Sony Ericsson will drive new medium. Purchases of consumer can be helpful in researching customers.. The peer group is involved in the process Handsets with higher value s.
Sony Ericsson to Adaptation of Sony Branding Identity by Sony Ericsson
Sony Ericsson is reformulating its strategy to move closer to its parent Sony's brand identity. It is now using phrase “make. Believe.” The decision has been taken at strategic marketing level and several strategic marketing campaigns will be launched shortly for realignment of the two. A fusion of communication and entertainment had always been focus of Sony Ericsson since start of the joint venture. This make, believe also brings Sony Ericsson closer to Sony group companies. Entertainment strategy becomes more obvious from this campaign. This ongoing transformation is laying foundation fro new outlook of Sony Ericsson. Realignment is vital part of this strategy. It has combined this strategy with a new culture of openness. This will shift the way of planning and building new prepositions. Social and digital media has brought customer closer to Sony Ericsson.
Sony Ericsson shifts ads spending into digital
Sony Ericsson is increasing its digital advertisement spending to a figure of £13m; Internet has become central in its global advertising strategy. It has increased 15% online advertising budget to 25% for its website development and online marketing efforts. It has turned online to have its presence in international markets specially targeting young consumers. Sony Ericsson is looking for cut in its TV, press and retail outlets advertising budgets. The emphasis will be put on digital marketing of its all brands including Walkman and Cyber-shot in international markets. Internet will play crucial role in brand recognition efforts its Xperia sub-brand. A separate web portal will be launched for X1 handset brand awareness. Xperia is being seen as competitor to iphone of Apple. Sony Ericsson is considering working with many firms for its digital global projects instead of single digital projects vendor Dare. Digital will be the most used way of Sony Ericsson communication with its customers. For future gloab prospects, Digital presence is crucial factor for Sony Ericsson. Sony Ericsson is fifth largest manufacturer of mobile phones world-wide after Nokia, Motorola, Samsung and LG. Sony Ericsson hopes that its digital strategy will be a competitive edge for a shift on its rivals. (Jones G 2009)
Sony Ericsson is transforming by new brand alignment
Sony Ericsson will realign its visual and brand values, which will promise an image of leader in communication and entertainment brand. It will also adopt Sony group brand message of “make, believe” as it's official as Sony Ericsson message. This will reinforce its partnership and delivery of quality entertainment through its handsets with Sony Group. Sony Ericsson has been fusing communication and entertainment after the establishment of the joint venture. The venture shows the bringing together of communication and entertainment. By this realignment and adaptation of Sony's message indicates further highlight entertainment offerings to its consumers. This transformation is foundation new Sony Ericsson. Realignment is an important step in this process. This is being combined with a culture of openness. This will bring a shift in ways Sony Ericsson does its prepositions. Consumer involvement in design process has been increased by extensive use of digital and social media platforms. These interactive social and digital channels will help Sony Ericsson in its strategy of more open and questioning attitude by involving greater number of consumes in this process.
Strategic marketing campaigns in a series will be launched the realigned visual identity of its products and showcase the start of its new message make, believe at Sony Ericsson. It will also include spark something viral campaign for its new Satio, Aino and Yari handsets and anl activation campaign for Sony Ericsson becoming global handset sponsor for the FIFA World Cup 2010. This will capture the passion of football lovers around the world.
Sony Ericsson promulgation of a new strategy
Gloabal economic slow down and intense pressure of competitors are main reasons for sufferings of Sony Ericsson in recent years. It will adopt a new strategy to compete these pressures. New strategy will be focusing on better services and high quality entertainment. Hopes are there that this strategy will bring Sony Ericsson back on track.
Sony Ericsson calls new strategy as Entertainment Unlimited. Managers have given fine details at a press conference, but the Sony Ericsson is planning a strategy which will be a blend of mobile phones and PCs and a good percentage of TV entertainment content.
In this new strategy, the Sony Ericsson announced MediaGo, which is considered as a continuation of its PlayNow music service. MediaGo added service in PlayNow which will enable users to download movies to their PC and then transfer movies to your Sony Ericsson handset. W995 Walkman phone has this capability of playing the length of films.
This service will also enable easy transmission of other multimedia contents such as music, photos and podcasts. The service also allows people to synchronize their handset music library automatically and automatic conversion of music files for best quality playback. The new touch screen phones have also been introduced by the Company. A new 12.1 megapixel camera phone with all type of multimedia phone has also been announced. These two new phones are hoped to play active role in achieving goals of Sony Ericsson's new strategy for more integration of entertainment in its handsets. Although this strategy is not a new one, but company argues that with this strategy, it will move to new heights. Walkman phones were also part of this entertainment strategy for listening to music while you are on the go. This “Entertainment Unlimited” strategy will take things to a new level, and now users can share and access to multimedia contents from mobile phones, to their personal computers and to their television screens. This is in continuation with its previous strategies. It has sold more than 100 million walkman phones and Sony Ericsson is looking for a new chapter in the development of the company.
It seems like a good idea, but it happens to one that there could be share of its competitors in development of this strategy. Nokia which is the world's largest mobile phone Maker, has developed throughout the Ovi services platform for more than a year a feature that enables users to share files from PC to phone and vice versa. Iphones have also provided users with access to iTunes Store, where users can access to music and videos of their choice. So Sony Ericsson strategy can not be termed revolutionary, but by adding more value to their products is required to move ahead in this stiff competition. The entire mobile phone market has witnessed shrink in second half of the year last year, as consumers bought fewer mobile phones due to economic problems. And this trend will continue for a while until economy pucks up. The impact of recession on Sony Ericsson is particularly deep. This is obvious by comparison finical results of 2007, 2008 and 2009. It was earning profit in 2007 but in 2008, it had a bear a loss of 248 million euros. The strategy is also not a guarantee to bring revival. Smartphones have bright future for next couple of years as indicated by analyasts. The sale of smartphones has increased 22.5% while the overall mobile phone sales dropped by 12.6% as shown in a market research by IDC, recently.
Sony Ericsson has not been good in well competing smartphone category. Last year, at the World Congress of mobile devices, the Sony Ericsson had made a lot of buzz with their first device, Xperia X1, window mobile. But the phone was available in North America only for long time before its global availability. But the problem is that it does not propose any major carrier in the U.S. and price of $ 800 for the unlocked and unsubsidized handset is too high for consumers, when they can get iPhone 3G on AT & T, BlackBerry handsets enabled with Verizon Wireless, or Google's Android G1 at a subsidized price of $ 200 coupled with a two-year contract.
Smartphone market is expected to have all action over the next couple of years, surprisingly Sony Ericsson is investing in development of best feature handsets for implementation of their Unlimited entertainment strategy. Sony Ericsson needs to bring convincing and appealing handsets to shake out in the market. It has to develop smartphones that can have features from its communication and entertainment strategy. It also needs to expand its market outreach to untapped areas of the world. North America has demand for cool and affordable phones, and Sony Ericsson can reach this market.
Sony is rolling out the its new brand message “make, believe”. This tagline aims to reflect that what ever you imagine, you can make it real. Brand development is aimed to give the phone maker a more entertainment identity as well communicating with its consumers in a more emotive touch. Its part of ongoing repositioning strategy of Sony Ericsson to be known as a communications coupled with entertainment brand image. It is planning to invest an estimated £7m for promotion of its new hero handsets and its Japanese named phones Satio, Aino and Yari. It has launched a major above-the-line campaign, as well as digital flash mob activity on digital media centered on an attempt to bring space hoppers back into popular culture.
Sony-Ericsson Declared Most Eco-Friendly Phone
Technology Company Sony-Ericsson was recently given the environmental friendly recognition, as its handsets were declared as one of the most environmentally-friendly technological phones. Environmental organization Greenpeace asked computer and phone manufacturers to come forward with their most eco-friendly products, ranging from mobile phones to notebook computers and to gaming consoles.
After examining the products on environment friendly standards like amounts of dangerous chemicals, energy efficiency, marketing strategies and recyclability. Sony Ericsson was at the top among 37 other products in the similar category. According to TMCnet, Sony-Ericsson's handsets received a rating of 5.3, out of a possible 10. The passable score was highest as the response rate was very low. The results were considered to be taken as step forward to technology's adaptability and responsibility for keeping the environment. Encouragement is the key to push the environment friendly products. The other organizations have also recognized the need for eco-friendly products and many new products have come in the market after the survey.
Sony Ericsson's mobile music strategy
Music has now become one of the main driving usages for 3G and larger data entertainment services in mobile phone end-user. And the trend is expected to continue Sony Ericsson has shown that it is committed in maximizing the value for money and experience for the users by its strategies. It is also committed to increase revenue for operators, and the Walkman family of handsets did this through music strategy. Music-related services and related applications are fundamental parts of this overall content strategy. Music is a way of super distribution by Sony Ericsson. It means legal download of music and sharing between friends with user friendly applications.
Although the Walkman mobile phones range is the main focus of Sony Ericsson's music strategy, music solutions in other sets are also given due importance. Network limitations end-user choice and model-version compatibility and market outreach are necessary to reach the end users. The music experience should be good on all products. DRM standards set by the industry are closely monitored by Sony Ericsson and develop products that have media source, and hence DRM, agnostic. Open Mobile Alliance's (OMA) DRM v 1.0. DRM is supported in all currently available Sony Ericsson mobile sets. This is the standard for playing branded music, which is officially copyrighted. For the incorporation of music applications where only branded music is handled e.g. media players, this resides with developer to use DRM protection or not. The coming convergence of fixed line and mobile broadband network service provider's convergence of audio-visual consumer electronic products with handsets is going to have massive effect on the mobilemusic market niche. Sony Ericsson foresees a tremendous growth in this category.
Sony Ericsson's new strategy
After having struggled for sales over the last few quarters with their position being reduced against their competition in the middle of the range segment, Sony Ericsson has started to react by developing a new mobile strategy which adds extra character to their production, in the same way as the Sony Ericsson Xperia X1, their first phone operating Windows Mobile, and the three new phones announced this week: Satio (ex Idou), Aino and Yari, with each of them having a specific use while all being multimedia oriented.
On the French mobile phone market, which at the moment is resisting better then the rest of the world, Sony Ericsson were able to gain a few percentage points in the first quarter thanks to their resellers stock reduction efforts, building brand loyalty as 65% of owners state that they would be ready to once again buy a Sony Ericsson phone for a future purchase (the average was 51%).
A public loyal to the brand
The maker has also taken the opportunity to put forwards the multimedia aspects of their products, with Sony Ericsson mobile phone owners using the camera, music and games functions more often then the average.
These are important arguments which can weigh heavily when carriers are deciding which phones to promote so that their mobile services can bring additional revenue.
While the sales volume on the French market went backwards by 5% in 2009 (and 10% in the world), Sony Ericsson is still confident that their phones offer quality for users that are looking for connectivity and multimedia options.
A strategy on three levelsTo get there, nothing is better then calling on the Japanese giant and their numerous general public product offerings like computers, console games and new generation televisions.
With this new approach to the market, Pierre Perron, Sony Ericsson's General Director in France has presented three new strategies that the company will be employing:
- Merging the experiences and entertainment
- Interaction of mobiles with general public electronic equipment
- Make the PlayNow Arena content portal available with applications and content
Sony Ericsson Unveils New Mobile Phone Strategy
Sony Ericsson has announced a new strategy for its struggling handsets business by attracting consumers for sharing content on its handsets with other electronic devices in the home. This is called Entertainment unlimited strategy. It connects mobile phones with TVs and PCs and home stereo equipments for easy content sharing very easily. The company has utilized combination of its PC, TV and mobile phone division for building this strategy. Idou is one example of such phones. It is also planning to expand its Play Now mobile content subscription service, which now includes movies as well as music files, to a provide broader service called MediaGo. This service is available in only eight countries currently, but Sony Ericsson hopes to double that in near future. This strategy is a big bet on mobile entertainment market as Sony Ericsson has reported big loss in fouth qurter of the last year.
Sony Ericsson's CEO Strategy vision
Sony Ericsson is facing an ever-changing market, which includes increasing competition in software and services. Google is moving into the handsets markets. Sony Ericsson's rival Nokia is moving into services, and the Apple iPhones have changed the composition of the industry. Komiyama, the CEO of Sony Erickson spoke to BusinessWeek's reporter Jennifer L. Schenker at the Mobile World Congress about Sony Ericsson's strategy.
Strategy for developed markets
Customer wants next is mobile internet with high speed and easy to use. The US mobile market is characterized PC environment, so this is a product strategy that is being applied to have appeal in US. This is brand recognizing product in US because Sony Ericsson does not have large market penetration there. And this strategy will attract customers.
Strategy for emerging markets
Sony Ericsson is having a good market share in Western and Central Europe and in Latin America as well, but Sony Ericsson is not a strong brand in emerging markets like India and China. Sony Ericsson has established a center in India and two new models for the local Indian market has been introduced. This market is dynamic and completive. Disruptions are large and new entrants are frequent in this market. The clear vision of its market position is very important. And it will help to play better in this emerging market. Sony Ericsson wants to combine together the best of entertainment on phones. Sony Ericsson wants to become recognized as among top three manufacturers of handsets worldwide.
Sony Ericsson online marketing strategy
Sony Ericsson has developed a wonderful online marketing strategy. They have adopted four ways for its products marketing online.
- Product reviews
- Service providers
They have included customer information pages for attracting new consumers. These pages have information about each handset with explain feature of the phone like full image, features and comparison with others. There my phone sections for people who have already own a handset of Sony Ericsson. Tips and tutorials for usage are provided in this section.
They have a large distribution channel and if somebody, even Amazon wants to buy Sony Ericsson products, it has to buy from Sony Ericsson distribution channels.
In micro sites like CNET, phones review are given and traffic from main portal is send to micro site. On micro site, link for main portal is also give. Advertising is done by these micro sites who also have product review. Product review is also done by many other sites. They are sometimes asked for product review
AT&T is a service provider for Sony Ericsson products and Sony Ericsson will help them by two strategies. Giving them products that could fit to their customer's needs and providing them with information about its handsets.
Sony Ericsson is leading brands in online campaigns
Sony Ericsson is increasing online advertisement spend from 15 % to 25 % of its total marketing budget. It's due to realization of internet's central role in its global marketing strategies. XPERIA is new addition in its range of Cyber-shot and Walkman phones. These initiatives will be highly dependent on online marketing campaigns, as the new strategy of Sony Ericsson is cutting advertising budgets for TV and print media. Sony Ericsson, the world's fifth-largest mobile phone manufacturer is one of major organizations who are relying heavily on digital marketing to gain completive edge and increase its market share. The specific segment targeted is youth. With the use of internet has increased greatly world wide, the use of internet for marketing of products makes a good sense for Sony Ericsson. Internet technology is more accessible in most of the parts of the world. This has made digital communication a cost effective way of communication. Many other industries like confectionary and beverages giant, Cadbury Schweppes, are moving towards digital marketing. Dell computers have also invested £100 million for development of digital channels for Europe US and Asia. So digital marketing which used to be a small part of marketing campaign I past, has gained a lot of importance. The big organizations are investing a good part of their marketing budget for digital marketing. Sony Ericsson is among such big organizations and getting fruits for this strategy.
Sony Ericsson's Global Activation Strategy to be managed by Iris
Sony Ericsson has announced today that it has appointed integrated marketing agency iris to handle its global activation strategy after following a competitive pitch. Iris will be implementing integrated campaigns across all of its sports marketing properties, retail business and sales promotion activities as its global activation agency. This appointment is part of Sony Ericsson's strategy to increase integration among all of its marketing activity. Driving efficiency and greater consumer engagement is also another motive. Iris will also be providing strategic and creative leadership for Sony Ericsson's sponsorship of $88m to the Sony Ericsson Women's Tennis Association (WTA) Tour.
Sony Ericsson reported positive figures for the first quarter of 2010 and Competition
Sony Ericsson is struggling to achieve a good market share in emerging markets including Asia. The competition is growing in the mid- to high-end handset sector. Apple's iPhone has become the preferred model for the discerning mobile phone user. However, Sony Ericsson's shift toward cheaper handsets has led to overall fall in average selling price. Its product range of Sony-branded features which includes Cyber-shot, Walkman and a recent addition of Bravia are attracting young but small demographic consumers continuously. Motorola and Sony Ericsson are fighting for the same target market as both striking up new innovations regularly to tickle fans of technology. As the competition is becoming hotter, there may be a price war. Nokia has already announced that it will reduces the prices of its new models to decrease profits of competitors down, as its supernove range is in the market to compete with Walkman of Sony Ericsson. Sony Ericsson is moving with a good strategy of broadening its handsets portfolio and geographic spread. A more focus on U.S. market is also a good move.
Financial results for 2008 shows huge drop in profits. Analysts had already predicted the situation. Sony Ericsson shipped fewer devices and had to lower the prices. The demand for high end handsets fell somewhat because of slowing economic conditions. It's facing stiff competition from Nokia, LG and apple's iphone in its cool devices. Its handsets are of good quality but have plain features while the market is moving towards data. It needs to catch up with customer tastes to compete other mobile phone manufacturers. Sony Ericsson is spending a big budget on research and development, which is major contributor in lessening its profits. It is spending so much to support its new handsets. Component costs are also increasing due to inflation and Sony Ericsson needs to improve its operational efficiency. Operational efficiency is usually seen as cutting jobs and condensing locations.
It is obvious from financial results of last couple of years that Sony Ericsson was having problems in having profits. To make the things work, company started restructuring work in 2008 and it will complete the process by mid of 2010. The goal of this transforming process was to reduce operating costs by Euro 800 million. Around 3000 people have left the company since 2008. The number of handsets reduced from 14.5 to 10.5 when we compare Q1 of 2009 and 2010. While the income between the two quarters have changed to 18 million from a negative figure of 370 million Euros, the picture is looking better. Selling prices also rose from 120 to 134 Euros per set. Sony Ericsson is focusing on high end users as it is obvious from increase in prices. Vivaz and X10 have just been launched, so there results would be incorporated in the results of Q2.
Sony Ericsson - announcement of the new products. Analyses of the company's strategy on the market
There are rumors about T650. I'll try to explain the reasons of these rumors. Each manufacturer has inside cycle of products development and gives code names to the new products. One year or even half a year before announcement nobody knows its full index. Series number is usually known. We can presume the index of the future product but can't be sure. Sony Ericsson uses women names to mark products. But it is impossible to show position of the product in its series, just describing this product with such name. That is why, your humble servant, made bold to give an index to the future product (T650, in our case), while the manufacturer changed its plans and positioning of the devices. We didn't change the index not to entangle the readers. We understood that it's better not to call new products and we decided not to do it in future. We would speak about products according to our internal classification, explaining the indexes we use.
Linea 3 is an example of product which allows following how the product name could change. This Smartphone is the successor of P900 but it is difficult to presume which index it will have when it will be launched. May be it will be P1000 or P980. So, if now we name it P1000 and describe its specifications, we'll arouse an unnecessary discussion. The other example is OH9. It is a revolutionary and deserves attention. The problem is that an expected date of launching is the beginning of 2005 or even later. So, it is possible to speak only about products that will appear in two-three months not to entangle facts.
Sony Ericsson Details Marketing Plans
The Sony Ericsson has announcement how it is going to work with agencies to realign its brands with Sony by adopting a more open approach towards customers questioning and participation in product improvement efforts. Sony Ericsson announcement of adaptation of Sony's tag line make, believe means a closer collaboration for building new brands. Leading globally agencies will be helping hand for Sony Ericsson in its achieving new strategic goals in functions of marketing, advertising and personal relations. Digital media will have more importance and utilization for new products. Sony Ericsson is looking for to become a communication entertainment brand worldwide. The entertainment content rich brand will become important with the help of leading global agencies. Sony Ericsson will work in an integrated way. Sony Ericsson is promising continuation in providing entertainment communication devices.
Sony Ericsson works with include Saatchi & Saatchi, Burson-Marsteller, Dare, iris Worldwide. These are leading global agencies in their fields of expertise. Sony Ericsson believes that collaboration with these agencies will help Sony Ericsson for provision of promised value through its brands. A series of marketing campaigns will be launched that will be incorporating new image and tagline of Sony Ericsson. The Sony Ericsson's Satio, Aino and Yari mobile phones will be launched shortly. Its global marketing campaign will be focusing on entertainment.
Brand Health Check: Sony Ericsson
Since launching in 2001, the company has carved out a niche for its range of Walkman and Cyber-shot-branded handsets, making it the world's fifth-biggest mobile manufacturer behind Nokia, Motorola, Samsung and LG.
However, Sony Ericsson's attempt to move into the top three by 2011 has hit a snag. Last week, its global head of marketing, Dee Dutta, announced that he is to leave the company, after tenure of six years, throwing the direction of the brand into uncertainty.
Dutta was responsible for revamping Sony Ericsson's identity in January 2007, putting its green ‘liquid' logo at the centre of its marketing strategy. He also shifted its advertising account out of Saatchi & Saatchi and into McCann Erickson after less than a year. News of Dutta's departure came just days after Sony Ericsson warned that profits for the first quarter of 2008 will be lower than expected due to slowing sales of mid-to-high end handsets across Europe, traditionally its most profitable market.
Sony Ericsson estimates that it will have shipped a total of 22m phones during the first three months of this year, generating between Euros 150m - Euros 200m in net income before tax, less than in the same period in 2007. The company plans to bolster its profits and expand its global reach through the addition of 15 handsets to its range this year; it has already debuted the X1, a touch-screen device designed to rival the iPhone.
Despite downgrading its growth forecasts, Sony Ericsson claims to have put in a strong performance in 2007, increasing its share in global mobile phone market to more than 9%, with 1.1bn phones sold last year.
Dutta's exit, however, could leave the organisation rudderless at a crucial moment, making it even harder for the brand to stand out as it prepares to embark on a brand overhaul.
We asked Ian Pearman, managing director of Abbot Mead Vickers BBDO, who has worked on Motorola's advertising account, and Dominic Chambers, former head of brand and marketing communications at Vodafone, how Sony Ericsson can still achieve its aim of top-three status in the market.
Ian Pearman managing director, Abbot Mead Vickers BBDO
Like a dog with two owners, a joint-venture brand is always at risk of being starved, and this one looks hungry. The tech advantages provided by Ericsson are invisible to consumers and that part of the brand now represents drag, while the potential thrust of the Sony half seems to be constantly dissipated.
Marketing music-functionality to a generation used to carrying around 10,000 tracks was always going to be challenging, but Sony Ericsson failed to build its defensive walls high enough before Apple entered the game.
The Walkman sub-brand will provide a little insulation from the cold, but reminding people they ‘love/logo music' is altruistic to the category as a whole, and has done little for the core brand.
The lack of a symbolic design-handset is also an issue in a high-touch category where a ‘halo product' is vital.
Opportunities to align the brand with emerging web applications, particularly social networks, have also been missed. Real tech advantage is rare, so it is odd that the brand has not made more of this.
- Be more Sony.
- Stop investing good marketing money trying to give the logo a meaning that is ultimately generic.
- Find a ‘halo design' product and concentrate on throwing the brand's weight behind it.
- Make more of current tech advantages that lie dormant.
- Work to be the best mobile platform for the next generation of web applications.
Dominic Chambers former head of brand and marketing, Vodafone
The mobile phone market is going through significant changes at present, driven by the decline in voice and text tariffs, which has led to a drop in monthly contract fees. This means there is less money available to subsidize the acquisition of fancy handsets.
In addition, networks have begun offering customers the option of upgrading their contract with a cheaper package, rather than a different handset.
After many years of growth, the key brands are finding that they need to work much harder in what is now a saturated market. Sony Ericsson has not managed to leverage the true strength of the Sony brand - its strong values of innovation, quality and design. Its recent advertising has been product-based and fairly forgettable, and not easily recognizable as Sony Ericsson.
It is difficult to discern what the brand stands for, which makes it resonate less with consumers against a resurgent Nokia and a powerful Apple, which has shown up the whole sector with the launch of the iPhone.
- Focus the brand communications, Sony Ericsson needs to be very clear about what it stands for, engage consumers at every opportunity and be known for something
- With the Walkman heritage, Sony Ericsson has more credibility in music than any other handset brand; ditch the tennis sponsorship get serious about music.
- Be clear about the roles of the different communication channels, i.e. let the mobile retailers and networks do the product advertising and promotion, Sony Ericsson should focus on brand and music.
- Combine the power of Walkman and Cyber shot in one handset; people love music and taking pictures. (Jones)
Sony Ericsson in Middle East and Africa
Middle East is one among Sony Ericsson's expansion strategy. It has significant sales growth potential, because of dynamic nature of the regional retail sector and demographics of the consumers. The purchasing power of this target market is significant. The Middle East and Africa are among the fastest growing regions in the world in terms of mobile phone subscription rates. The region has commercial importance as well. Sony Ericsson is working closely with its channel partners closely to tap this market and achieve some results. The Saudi Arabia, Algeria, Iran, Egypt and Nigeria are being serviced by Sony Ericsson's regional headquarters in Dubai. The cellular market is liberalized has increased completion among handset manufacturers for share in this emerging market. Sony Ericsson has achieved significant results in Saudi Arabia, UAE, Morocco, Nigeria and South Africa. It has recently established offices in Saudi Arabia and Algeria for better services provision in both the markets.
Its share in the Middle Eastern and African market is growing rapidly. Even faster than Sony Ericsson's average growth rate worldwide. Core strengths of Sony Ericsson lie in the features and technological specifications it offers in its phones. Effective distribution and marketing strategies employed by Sony Ericsson are also a competitive edge of the handsets provider. Sony Ericsson is employing multiple distributors in most countries in this region, they work non-exclusively. Sony Ericsson supports them with marketing and advertising functions. The distributors of its handsets sometimes boost their retail presence themselves. The retail business is growing in these countries especially in Saudi Arabia. Mainstream electronics stores are being attracted by marketing efforts to have Cyber-shot and Walkman phones in their stores.
In the growing worldwide market for handsets and their accessories, the gap in technology which separates mid-end mobile phones from top-end models is narrowing as manufacturers are trying to bring high-technology features for a wider consumer base. The Middle East presents a lucrative market for mobile phone vendors such as Sony Ericsson because of an increasingly liberalized regional telecom sector which is boosting cellular subscriptions and a hard working labor force with high disposable income. The company has been successful in fusing innovative technology and core brand competencies for developing mobile phone products that are able to achieve significant business volume across the region, but particularly in the Gulf countries. Sony Ericsson was established in 2001 as a joint venture between handset manufacturer Ericsson and consumer electronics giant Sony. The combination and fusion of each company's set of core competencies provides Sony Ericsson a clear advantage over its competitors in the mobile phone market. Digital cameras and MP3 players are becoming essential components of handsets, Sony Ericsson's recent launches of its Cyber-shot and Walkman series can be seen as a direct struggle to tap the brand heritage owned by Sony in both markets. The strengths of both companies are complementary as Ericsson is recognized as leader in telecom infrastructure while Sony is an established leader in the consumer electronics. The Middle East is one of Sony Ericsson's key global markets having growth potential in sales because of the dynamic nature of the regional retail sector and a demographic flush with purchasing power of consumers.
The Cyber-shot range of mobile phones boasts features that have yet not been incorporated in Sony's digital camera range. The ‘best pic' feature is a key highlight in this respect, which works by taking a salvo of images whenever a user takes a photo, providing them with an option of nine shots from which the best one can be selected. As a user presses the camera trigger, it takes four photos before the click, with a 3.2-megapixel quality. Sony Ericsson is also expanding its range of mobile phone accessories, including its Bluetooth headsets.
The booming demand for low-cost handsets in the Middle East and Africa is a key to the company's growth strategy in both these territories. Sony Ericsson is keen to expand its presence in this entry level sector by providing consumers with quality products having high feature specifications and affordable prices. Demand for the company's smart phones is also increasing as the demand for premium handsets is also increasing. These premium products can be used as business tools by them. It has become very important segment as 3G service providers are widely available now and the benefits of 3G are becoming obvious to every day consumers as well as business users. The subscription is also becoming increasingly cost-effective to GPRS and 3G services. Connectivity is essential feature of modern lifestyle at both business and personal levels. Sony Ericsson facilitates this by its products. Sony Ericsson's P910 Smartphone is responsible for generation of strong sales for the company in the Middle East. Forthcoming P990 is also expected to achieve success when it is released at the end of this year. The orders were pre-booked from Sony Ericsson's retail distribution partners even several months before the actual launch of the product in the market. Sony Ericsson works closely with its distribution channel partners to make sure that each product launch is supported with the appropriate marketing and advertising strategy along with after sales support. Sony Ericsson makes available its entire portfolio to all of its customers. Sony Ericsson works with the forecasts and launches most of its products in all the countries it operate. Sony Ericsson has agreements with specific customers at times, in specific markets exclusivity window on a product, color or a specific product segment. This happens especially in cases when it's launching a new handset and there might be limited availability of its stock. It's important for distributors to know about what they're getting into when they deal with Sony Ericsson.
There is class of distributors who are more interested in trade, which is a fine business model. There are some others who want to be authorized distributors. This latter sector is provided with premium products and services before the availability of these products and services through secondary channels. Sony Ericsson offers marketing services, terms and conditions to its distributors like as price protection and after-sales support. Advancement of products would mean extension for peripheral products and services. These extensions are also provided by Sony Ericsson. It also provides marketing support when it launches products with those customers. Grey market is a challenge for the company for its channel management and relationships with its specific authorized distributors in certain markets. It nullifies the impact of the grey market on its distributors via day-to-day contact with its partners. Sony Ericsson works continuously to avoid any conflict of interests of its authorized distributors with grey market through improper means. Authorized distributor is asked not to sell intentionally sell into another market, other than assigned one. Every handset range is capable in regional languages of Arabic, French and Farsi-language. Handsets are also customized some times to meet specific requests from mobile operators. This is the strategy for nullifying imports and grey markets on Middle East.. Grey market activities generally present a challenge to the mobile handset sector. This is because of the fact that many traders still view mobile phones as commodities. The accessories could be counterfeit in grey market products. Unfortunately, such trade is viewed as an easy opportunity to make money by many grey traders. The impact of such grey market trade in the Middle East is gradually diminishing because of the more advanced nature of products and shorter product life cycles of handsets in general. The trade business is changing as a whole. A few years earlier, this factor could have forecasted potential disaster for the industry. Mobile phones are becoming more sophisticated and it is no easier for traders to import handsets from foreign markets. There are certain issues like warranty, software applications and the usage of the handset, which is now tailored to specific markets. These issues were not there when mobile phones were simpler. Many former grey market traders have turned into authorized distributors, especially the professional companies with growth perspectives. They have realized the benefits of working with manufacturers which guarantees them with a more stable and sustainable environment growth oriented business environment.
Being more active and quick in responding to market fluctuations, the products are changing frequently, thus new products are coming frequently. This dynamic nature of the market is also making it more difficult for grey traders to trade. These things have reduced the deteriorating impacts of the grey market. Sony Ericsson is in an industry with fast paced and Sony Ericsson is growing faster than the average market growth in other areas of the world. Additional products are being launched by Sony Ericsson, and it is planning to customize its range further with a motive to enter in new markets such as Yemen, Tanzana, Kenya and Uganda. Sony Ericsson is strengthening its presence in the Middle East and Levant markets as well.
Sony Ericsson opens office for Africa and Middle East at DIC
Dubai with its modern infrastructure, excellent communications and transportation channels, offers the ideal location for regional hub of Sony Ericsson. The growth of Sony Ericsson in the Middle East and Africa has been exciting and well rewarding. Middle East consumers are very technologically aware and demanding. The strong growth is expected in this region in the years to come. Sony Ericsson has been welcomed warmly by Dubai internet city. It is expected from Sony Ericsson that it will enrich the community with its innovative technologies and high standards of mobile communication. The regional hub will integrate its activities with its headquarters at London.
Middle East and African market
The Middle East and Africa region is one of the advanced markets globally. The mobile phone industry has a lot of potential which can be tapped by international mobile phone sellers. The potential for growth is amazing. Sony Ericsson is determined to continue to be innovative in its communications and entertainment phones and become market leader in this market. The general marketing approach of Sony Ericsson has been impressive in this region. A serious emphasis is put on Public relations for spreading in this region. Sony Ericsson's adaptability, localized products and growing awareness are important components of Sony Ericsson's marketing Strategy in this region.
Sony Ericsson's music download service PlayNow has been launched in UAE in partnership with Arabic music producer Rotana. This means that users of PlayNow-ready Sony Ericsson handsets can now access a large variety of real music downloads and digital ringtones through their mobiles. Sony Ericsson's PlayNow application is a meant for direct-link quality music download withl communication tool into a stylish means of self expression and music entertainment by a simple click of a button. This service enables consumers with easy-to-use service for downloading songs from a range of the top 10 Rotana songs. PlayNow is available in K500i, K700i, K750i, S700i, K510i, W300i, W700i W550i, W800i, W900i, Z520i, and Z530i. GPRS service should be activated on handset by the service provider for using this application. The downloaded songs are added to a ‘My Sounds' folder in your handset and charges for download are billed to the user's account
Sony Ericsson sales training
Sony Ericsson reached out to its retail channel for helping them. The Middle East and African region organized this session to educate more than 200 sales force from its partners for pushing sales of SE Z520i handset to customers. Sony Ericsson invited top consultants to address the participants. The consultants explained the high-tech features of the handset and getting them to take part in role-playing situations designed to boost their confidence and selling skills. Training gave them tips about how to best approach customer and handle enquiries and finally how to sell the handset. This session was very helpful for sales personnel. This way, Sony Ericsson is helping their retail partners with an ultimate goal of increased market share of Sony Ericsson in this region.
Indian market for Sony Ericsson
Sony Ericsson has not been able in making a major breakthrough in the Indian handset market in couple of last years. Now Sony Ericsson wants to position itself as mid- to high-end segment mobile phone. So it will be able to avoid cut throat competition in the lower-end mobile phone market. Sony Ericsson do not want to be in a segment where there is very less money. Low end will include Mobile phones in the range on 3000. The focus is on profitable growth. In the past few months, Sony Ericsson has concentrated on smartphones and has launched its alternatives XPERIA and VIVAZ series. For this target, company has also pushed its marketing people. Actress Kareena Kapoor has been appointed as the new brand ambassador. A new partnership with the likes of MTV for XPERIA X10 has been established. They are identifying new ways to push sales. Nokia is present in all segments of the market, while Sony Ericsson is not.
Sony Ericsson revives India strategy with new phones
To recapture market share in the fastest growing mobile phone market in the world, Sony Ericsson has restructured its Indian strategy with a mix of new products and more focus on retailing and distributing activities. The Sony Ericsson's market share in the Indian mobile market has declined over the past few years. The gap has been filled by Samsung and LG. Sony Ericsson want to enhance its performance in India by leaving behind its past. This is very important market and among top five markets in terms of revenue and volumes both. The mobile phone maker has launched a new portfolio of five handsets including one with a built-in high-definition video recorder. Both Android and Symbian phones are among new models.
The strategy of Sony Ericsson is not going after the low-end market or the rural segment where the volumes are increasing rapidly. The strategy here is superior products, strong partnerships with distributers & agencies and better customer experience at retail points. Sony Ericsson will tackle the low end tech market later on. Nokia has launched a great number of products targeted at rural population. Sony Ericsson's product portfolio for the mid to high-end segment, which also includes the enterprise users, is much more advanced than rivals. The five phones introduced are in range of 15,000 to 35,000. It does not have any plans to start manufacturing of its mobile phones in India and will be shipping handsets from its plant in China.
Sony Ericsson Indian Strategy
Mobile handset manufacturer Sony Ericsson has recently announced setting up of mobile phones Research and Development (R&D) unit in India to strengthen its presence in the world's fastest growing market. The R&D centre will be established at Chennai. The investment in centre was not disclosed. The company was planning at some pint of time to start manufacturing handsets in India with the help of its partners. This center is part of its global strategy to reach the top three positions in the global mobile phone market. The new centre will become a part of Sony Ericsson's global network of R&D units in countries including China, Japan, Sweden, the Netherlands, the US and the UK. Sony Ericsson estimates the Indian mobile phone market have doubled last year, as more than 62 million mobile phones were sold in the last 12 months.
Sony Ericsson realigns brand with Sony Group
As a part of its ongoing business transformation in globally, mobile manufacturer Sony Ericsson will be adopting Sony's brand message and the tagline “make.believe” in Indian market. The realigned brand strategy will be implemented in all aspects of the product including packaging, portfolio, retail, customer service, human resources, corporate communication, marketing communications, internal communication and digital.
Sony Ericsson is already very closely aligned with both parent companies in variety of numerous ways. This development will lead Sony Ericsson to even more closer cooperation and collaboration with the Sony group companies for improvement in the areas of content and entertainment.
The global campaign will be having special focus on Indian market as one of the key regions and will support the launch of Sony Ericsson's new mobile phones - the Aino, Satio and Yari. While its handset Aino will connect to Sony's gaming console, Playstation 3, via Remote Play; Satio boasts of a 12.1 megapixel camera; and Yari will facilitate gesture gaming. these will be launched in couple of weeks. The brand will also be changing its liquid identity in india as well.
The three phones will be launched in the coming weeks, Sethi said. Apart from the tagline, the brand will also change its ‘liquid identity' logo by adding seven new colour variations and the ‘liquid' flowing from it. A series of strategic marketing campaigns will be launched in few weeks time. It will include a ‘spark something' viral campaign for the new mobile phones.
Sony Ericsson Will Place New Call to U.S. Market
When Sony and Ericsson joined forces in the mobile phone industry in 2001, many expected the new brand would give market leaders Nokia and Motorola a run for their money.
It didn't quite turn out that way. Ericsson and Sony had a combined world market share of 11.5% When Sony and Ericsson joined forces in the mobile phone market in 2001, many expected the new brand would give market leaders Nokia and Motorola a run for their money.
It didn't quite turn out that way. Ericsson and Sony had a combined world market share of 11.5% in 2001. Three years later, Sony Ericsson controls about 6%. Meanwhile, the brand has taken a low-key advertising approach in the U.S., spending $8 million on media last year versus Ericsson's $37 million in 2000, per TNS/CMR. (Sony spent $4 million that year promoting its handsets, per Nielsen Monitor-Plus.) The brand's highest-profile effort was a controversial guerrilla program in which Sony Ericsson reps asked unsuspecting tourists to take a photo of them with the brand's digital photo-enabled handset.
Ken Hyers, senior analyst with In-Stat/MDR, Boston, said Sony Ericsson has been a disappointment. “It seemed like a marriage made in heaven,” he said, “but it appears they have not been able to integrate their designs. What they've released has not been compelling.”
After three years of lost market share and under-the-radar marketing, however, Sony Ericsson is planning a splashy TV campaign for the states this fall, said Dee Dutta, corporate vp/head of global marketing. Dutta was on hand at a press conference in New York last week in which the brand announced three new phones for the U.S.—the T237, the Z500 and the T637—all of which take photos and some of which look more like cameras than phones.
Dutta said that Sony Ericsson had been focusing on turning a profit over the past three years. Having achieved that goal, the brand is ramping up its ad efforts in the U.S. Dutta declined to say how big the campaign would be except that it would be “substantial” and that Bogle Bartle Hegarty's New York office would be handling the work. For the past three years, Sony Ericsson's creative has originated in BBH's London office. Sony Ericsson also brought in David Bent as vp-marketing from Sony. Jon Maron, who previously ran Sony Ericsson's U.S. marketing, left two months ago, Dutta said.
With work just beginning production, Dutta said it was too early to talk about a creative strategy, except to say that ads in the U.S. will not employ a tagline. “If we wanted to be like Nokia or Motorola, we'd have a tagline,” he said. “I have a vision as to where we want to take the brand.”
Product placement will also be part of the mix. Though Sony Ericsson was James Bond's phone of choice in 2002's Die Another Day, it's unlikely the brand will re-bond with the property. “Bond for us was a good thing, but there were like 50-odd placements,” said Dutta. Instead, the phones will pop up, appropriately enough, in upcoming Sony films. (Wasserman)
Sony Ericsson eyes move into China
Sony and Ericsson agreed to merge their handset units last April in china. Both companies are in the middle of integrating their mobile phone operations. Setting up the subsidiary is the considered first step for introducing Sony Ericsson products in China. The venture needs yet to be approved by the Chinese authorities. Sony Ericsson expects that office will be functioning near future. But Sony Ericsson expects the Beijing office to be up and running by the end of May. Sony has a cell phone facility in Beijing, while Ericsson operates manufacturing units in Beijing and Nanjing. Sony Ericsson's Beijing unit will be focusing on making of GSM mobile phones for the Chinese market. It will also be a platform for introduction of third-generation (3G) handsets when the technology will be introduced to China. (Foo)
Globally standardized vs. locally adapted packaging - A case study at Sony Ericsson Mobile Communications AB
This thesis explore how the balance of a packaging standardization and adaptation strategy, from a distribution and sales perspective on different markets, can satisfy the markets needs and increase sales. An inductive approach has been used as well as the thesis is both explorative and explanatory. Since the authors wanted to find a broader perspective and analyzing secondary data, the following data collecting methods have been used: literature research, interviews, questionnaire and observations. Furthermore, a single case study research approach has been used in the thesis. The case study approach leads to expanding and generalizing theories but does not provide a statistical generalization. The literature studies started the master thesis where previous packaging as well as standardization vs. adaptation research was examined. Based on packaging logistical theories, a packaging questionnaire was sent to the case company's market units. Furthermore, in-depth interviews were held with employees at selected markets. To further broaden and deepen the knowledge regarding the perception of the packaging portfolio at the case company's markets, field studies at two of the selected markets were conducted where observations and interviews with different actors were performed. It is concluded that successful retailing is impacted by the choice of packaging strategy and what packaging portfolio to use on different markets. Different markets have different packaging related needs and in the case of Sony Ericsson, the authors have identified the need of going towards a more locally adapted packaging strategy. However, as previously discussed (e.g. see Jahre & Hatteland, 2003), trade-offs exist between logistical efficiency and marketing potential. This thesis has shown that there is a need for Sony Ericsson to adapt their packaging portfolio to market specific needs and demands in order to compete successfully. The authors recommend that Sony Ericsson divides their packaging portfolio into two different portfolios, one for pre-sales promotion markets (where the primary packaging is used as a marketing tool) and one for post-sales promotion markets (where the primary packaging should confirm the purchase). The most important variable that separates these markets is the size of the primary packaging. Pre-sales promotion markets need larger primary packaging in order to attract end-customers. This is no need on the post-sales markets. The authors have developed two models in order to identify how the sales channels are functioning (MAJO model) and how well the current packaging portfolio is perceived at the focus markets (packaging portfolio evaluation model). These models have been of major importance in the analysis and the authors strongly believe that they could be used at other global companies in the fast moving consumer electronics goods industry. (Fagerlund & Körner 2010]
What's Ailing Sony Ericsson?
Sony Ericsson is faced with hurdles of shrinking sales across the industry and overreliance on the Western Europe market for its sales.
When Sony Ericsson signed tennis star Maria Sharapova as its first-ever global brand ambassador, there was hope that her cachet would boost sales of its high-end multimedia handsets. These handsets are facing a lot more competition these days from the similar models of Nokia, Samsung, and Apple (AAPL). The continuous losing matches by sharapova put a question on the choice and analysts say that her best days might be over now.
The Japanese-Swedish handset maker scored big a few years back with a series of devices built around Sony's iconic Walkman marquee. But analysts believe that the sub-brand has become a bit stale and Sony Ericsson hasn't yet been able to get some other move. Some analysts have even starting to compare Sony Ericsson to Motorola, which stumbled by relying heavily and too long on its once hot-selling Razr series. Lower market demand and delay in launching of products planned are main reasons for lower revenues.
Sales Falling Across the Industry
It was Sony Ericsson's second profit warning of the year. After first quarter, the mobile manufacturer reported a 47% year-over-year reduction in pretax profits, to $304 million, on account of sales down by 8%, to $4.2 billion. Sony Ericsson declined requests to make available their executives to discuss its financials or market conditions in the 2nd quarter. The conditions are similar to the whole mobile manufacturing industry to some extent. Handsets sales fell 16% in Western Europe in the first quarter which was the first such decline recorded since 2001. There are indications that weakness is spreading elsewhere as well.
The numbers are heading down due to the recession in economy. In Western Europe, spending-conscious buyers are not buying high-end models in favor of midrange alternatives that often are coupled with free with prepaid service contracts. And in emerging economies, which have been the growth driver for the mobile phone industry in recent years, handset owners are not buying high end handsets as they have to meet their rising expenses for food and fuel. This delay economy recovery especially lowers Sony Ericsson and Samsung revenues significantly. These mobile manufacturers' sales rely more on replacement sales in emerging markets than on first-time handset buyers.
Too Concentrated in Western Europe
The trends are tough for everybody, but Sony Ericsson is being hit harder than most of its rivals. In the first quarter of 2007, the London-based company posted global sales growth of 64%.
A year later, that had fallen to just 2%, and sales are now declining, says Neil Mawston, director of the global wireless practice at researcher Strategy Analytics in Milton Keynes, England. As a result, Sony Ericsson's global market share has slipped from a high of 10% in the second quarter of 2007, to 8% in this year's first quarter, knocking it from fourth to fifth in global ranking behind Nokia, Samsung, Motorola, and LG Electronics.
Macro trends explain only part of the problem. Analysts say Sony Ericsson also has made a number of missteps that have cost it momentum. For one thing, while competitors like Nokia have spread their bets around the world, Sony Ericsson's sales are still concentrated heavily in Western Europe. “This market is clearly the weakest globally today and seems to be heading for another year-on-year decline in units and revenues in the second quarter,” says a research note from Dresdner Kleinwort. Forecasting only a gradual improvement in Sony Ericsson's profit margins, the brokerage on June 30 cuts its forecast for co-parent Ericsson.
Sony Ericsson also continues to be weak at the low end of the market, where the strongest growth is happening. The phone maker can't come close to matching Nokia's economies of scale and global distribution for phones priced at $30 or less—crucial to expansion in emerging markets, analysts say. To help remedy the problem, Sony Ericsson entered into a licensing agreement with French electronics giant Sagem in March 2007 to help it produce low-end phones. The first model using the Sagem technology is due out later this year.
Faced with Declining Prices
Although it helped pioneer in high-end Smart-phones that acted like handheld computers, Sony Ericsson is also facing far more competition in this business segment today. While competitors have come up with products that have ability to compete with Apple's iPhone, Sony Ericsson has been slower in its reaction to changing market conditions. Sony Ericsson stuck primarily with “candy bar”-style handset designs as its rivals Samsung and LG have added clamshells, sliders, and touch screen devices to their handset offerings. So there are lot alternatives available, that is why so many people have switched. Unit growth is slowing down in the mobile market, but the average selling price per device is declining by around 10% every year. That's making hardware makers to move into the services business to deal with lower revenues and thus profits. Sony Ericsson needs keep up with Apple iTunes as well as Nokia's Ovi Internet portal now. Analysts suggest that the company should probably develop its own service offerings to keep up with market conditions, but first of all, it must straighten out its hardware issues. Sony Ericsson is now aware of its shortcomings and working to fix them. A deal with Sagem will help company to move to lower prices. New handsets will include sliders and clamshell formats while a new line of phones powered by Microsoft windows will launched.
Sony Ericsson in the UK
Mobile Telephony in the UK
At last count, there were 69.657 million mobile cellular subscribers in the country, more than twice the number of main or land lines (33.602 million). As uptake grew between 1 and 2 percent each quarter, the subscriber base could well be 74 million at this time. Handset penetration may already be at saturation point, with 90% of the population in Britain already owning at least one mobile phone (O'Brien, 2008). While subscriber growth (as indicated by package or SIM purchases) crept up between 1 and 2 percent quarter-to-quarter, revenue increased by an average of 5% for the four mobile operators covered in Q3 2007. This suggests more usage, that is, more calls, lengthier conversations or paid downloads of value-added services.
But just what revenue base are we talking about? Over the five-year period from 1997 to 2002, the domestic market expanded 153.3 percent to the level of £8.18bn. The subscriber headcount ballooned by 412.9 percent although call minute volume grew “just” 383.6%. This suggests that subscribers with lower disposable income had entered the market. Nor has market growth been uniform. The peak of revenue growth was 35% from 1999 to 2000. This slowed down to 19.2 percent year-on-year in 2002. Again, these show that the UK market at least has reached the plateau phase of growth. Snatching or defending market share will have to go hand-in-hand with convincing subscribers to trade up to newer, jazzier models.
Undaunted by the dominance of Nokia, as well as the clear leads enjoyed by Motorola and Samsung, SEMC has stuck to its guns. The company leveraged its core competencies in music and video to claim a global market share up two percentage points to better than 9 percent last year. Three years back, Nokia's share of the world market fell to less than a third. New entrants from Asia had exploited gaps in the Nokia portfolio, in particular the absence of the now-familiar clamshell design (Bartlett, 2005).
The effectiveness of advertising targeting a personalized music experience was revealed in the fact that Sony Ericsson moved 60 million music-enabled phones in 2006, far better than Apple's iPod which sold 39m units in fiscal 2006.On the continent, SEMC may well have pulled even with Nokia. The Swedish Magazine M3s (issue 7/2006) published data asserting that Sony Ericsson is already thebest-selling brand in Nordic Europe.
At last count, industry growth continued apace at a satisfying 1.5% clip from the second to the third quarters of last year. Going by Office of Communications (2008b) analysis that growth was driven by multiple-subscription users - that is, those who had more than one handset or SIM - it would appear that the period of rapid expansion is over. One is justified in suggesting that the industry has already entered the plateau phase of its product life cycle. Nonetheless, the multi-user phenomenon is beneficial to handset makers like Sony Ericsson. The successful entry of the Apple iPhone also demonstrates that improved functionality and aesthetics motivate subscribers to upgrade. Heavier usage of SMS and MMS appear to be driving revenue growth as well (Ofcom, 2008a). At least for the four carriers covered by official reports, these services contributed from 15% to 25% of paid revenue. The probable usage rates may be considerably higher given that toll charges and revenue-per-transaction for SMS and MMS are generally lower than for regular calls.
The most significant developments in the near term will likely be:
- The integrated single-chip, incorporating all phone circuits plus memory, that will open up new design possibilities beyond the ubiquitous “candy bar”.
- Faster CPU's, storage beyond the common 8-gigabyte standard to power
- More powerful video applications and transmission.
Product Offering - I propose a next-generation Esperia X3, one that augments the current capabilities and work functionality of the X1 with a sportier, sleeker look, more colors, better music capabilities than the W910i, and all the capabilities of the Sony Video-cam built in. Advertising Concept - Heavily aspirational, the ultimate 3G phone in the world. Embodied in the theme, “I [SEMC icon] am having it all”. Sub-headline: “For all the lives, you live, ready whenever you are.” Benefits - “Be the best mobile warrior at work, tune in to sports broadcasts and YouTube when you need a breather, tune in to radio, download and share music to your heart's content. And best of all, the Esperia X3 is your “Videocam” in a pocket. Capture a presentation, catch a cloud, record every goofy moment, zoom in close to the action on the pitch or the rugby field, the lass in the train, rabbit all you like but never miss another moment, lovely or daft.”
Supplementary Campaign - Create full-page newspaper or magazine ads and posters depicting each one of the above pool of talents in a situation that plays up the features or capabilities of the Esperia X3. For maximum novelty, rotate the posters and press inserts at monthly intervals for the rest of the year. Promotion - Run three video contests centered on sports, family and business timed for spring, summer and fall. Have all participants send them to a YouTube clone to be named the “Sony Ericsson X3 Video Awards”. Just before Christmas 2008, re-assemble the all-star cast for the Annual Awards, paying out cash prizes starting at £100,000.London-based Sony Ericsson is doing quite nicely in its home market. Content to leave the market-share battle to industry leader Nokia, Asian brands and newcomer iPhone, the company has done well with a focus on margins. Nonetheless, SEMC enjoyed robust volume and margin gains in 2007 and looks poised to create a new paradigm based on the Esperia X1.
- Synergy with other SONY operations and products (e.g. Sony BMG, SONY car radios and lately, even the PlayStation)
- Award-winning products. The V800, for instance, was voted Best 3G Handset for 2004 by the GSM Association. A year ago, the K800 Cyber shot won the ‘Best 3GSM Mobile Handset' award.
- Was first to launch Java 3D-enabled handsets, and aggressively pursues broadening the market for 3D gaming (Sony Ericsson, 2007b).
- Worldwide, one-look brand-building ad campaigns
- The PlayNow Arena will provide incremental revenue streams from mobile games, gaming and music partners.
- Primacy to margins rather than market share (Marketing Week, 2007)
- Primacy in Northern Europe and the UK still has to translate to the “look of the leader” globally.
- Given that market at or close to saturation, retain emphasis on trading up
- Progressive convergence of communications, gaming, music, location-tracking and vide
- Well-positioned to leverage the transitioned from voice to content services.
- Higher unit revenues from increasingly more sophisticated handsets. This is consistent with SEMC's premium market positioning.
- Negotiate to obtain mobile gaming (online casinos) platforms.
- “Mobile marketing”, advertising over mobile cellular networks
- Falling average selling prices (and the resultant effect on its high-level image) because SEMC broadened it portfolio to keep pace with aggressive entry-level pricing for the Nokia 1100 in developing market
- Nokia acquired Navteq, making it potentially more costly for SEMC to acquire the digital maps needed for embedded location tracking in the near future.
- Personal navigation device manufacturers have transitioned to offering embedded phone capabilities.
- “Nokia Comes with Music”.
The most significant developments in the near term will likely be:
- The integrated single-chip, incorporating all phone circuits plus memory, that will open up new design possibilities beyond the ubiquitous “candy bar”.
- Faster CPU's, storage beyond the common 8-gigabyte standard to power more powerful video applications and transmission.
Sony Ericsson : Eating Into Competitors Territory
Things were not the same at the time when Sony Ericsson came into existence in October 2001. Ericsson though had previous experience in mobile phone manufacturing had been largely unsuccessful in designing a true best seller. The earliest Sony Ericsson mobile phones earned a dubious distinction for being fiddly and at times, unreliable. Enormous brand loyalty enjoyed by Nokia didn't help their cause either.
But as the consumers got more and more comfortable with the basic usage of the mobile phone, invariably, the demand for ‘more' mobile phones increased. It was then, when Sony's years of experience and technical know how of LCD screens, cameras and more popularly music changed the dynamics of the uni-polar mobile market.
First Sony Ericsson mobile phone that had some real impact and made everyone take notice is the Sony Ericsson T610i. When it was launched, it was one of the most advanced handset yet had very competitive price. Its petite size during the ‘brick sized' camera phone era was received with much enthusiasm across all sections of the market. That was only the beginning.
The major piece of communication and entertainment fusion was seen when Sony Ericsson Launched W800i. A great marketing strategy was incorporated in this popular brand ‘Walkman' with its music featured phone - a Walkman phone. Overnight, popularity of Sony Ericsson's phone raised many folds. Following its success, a series of Walkman phones were released to fill up every price segment to cash in. It can be safely stated that the Xpress Music line up from Nokia is but a formal strike back to the astounding success of the Walkman phones. Similarly, Sony Ericsson's camera centric K series now marketed with a reputed digital camera brand - Cyber Shot.
Sony Ericsson needs to make sure that they will identify newer strategies that are globally competitive
Strategic control shapes the decisions that are taken by corporate rulers in relation to 'the determination of the basic long-term goals and objectives of the enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. Strategic decisions set or alter the structure of the basic parameters within which an enterprise acts (1997). To control the implementation of the new strategy, communication systems will be used between the members of the organization. The communication systems will assist in monitoring the new strategy and its effects on the organization. The implementation of the new strategy will be validated via its effect on the company and the industry. To assist strategic control, control techniques will be used. The following part lists the probable control techniques for Sony Ericsson.
A. Balanced Scorecard
The balanced scorecard was introduced byandto measure whether the activities of the company is meeting its objectives. The balanced scorecard have become a fertile field of theories and scholastic research, as times past the balanced scorecard was altered by various individuals depending on the need of the environment. When Sony Ericsson implements the balance scorecard it will translate the company's vision into operating goals, the balance scorecard will communicate the vision and then link it to individual and organizational performance, the balance scorecard will also lead to a much strategize business planning process, lastly the balanced scorecard will help the company to know how to gain feedback and learn from such feedback. This in turn will help the company adjust its strategy according to the feedback and what they have learned from it. A disadvantage of the balanced scorecard is studies not linking balanced scorecard to improved financial performance. This could mean that the balanced scorecard can create changes to the financial performance but it doesn't necessarily mean that the financial performance will improve. This also means that the balanced scorecard can only initiate the movement in the financial performance and not create methods to increase the financial performance of the firm.
Benchmarking can help Sony Ericsson compare what it does against what another organization does; it puts the basis of comparison on its cost, time spent or quality of service. A problem with benchmarking is it forces restriction on what has been done. Benchmarking does not help the organization to achieve marketing share instead it is a catch-up managerial tool.
C. Sony Ericsson Budget
The company's budget in 2007 reached €5,380,000. This budget was used for the cost of production and the other expenses made by the firm. Each expense of the firm was duly noted and recorded. The cost for the company includes the production expenses, supplies expense, rent expense, salary expenses, tax expenses and other miscellaneous expenses.
D. Project Program management
Project management will not work if managers are not knowledgeable about the project they are guiding. Putting project managers that knows about economics into projects that are purely technical in nature would cause the failure of such projects. There is a need for performance measurements during project making. Performance measurements help in knowing whether the people working in the project can finish such task at the fastest time possible. There are different methods used to measure performance this includes GANTT, PERT and CPA. Gantt charts can be understood by a wide audience because it makes use of a common technique for representing the phases and activities of a project. Gantt charts show little information per unit area of display. It can be said that projects are considerably complex than can be communicated effectively with a Gantt chart. Program Evaluation and Review Technique (PERT) is known as a method that helps in analyzing the involved tasks in completing a given project. PERT focuses on the time needed to complete a task. Pert charts require the minimum time needed to complete the total project. The limitation for PERT chart involves human errors. Creators of PERT charts may omit certain activities; PERT chart creators may also organize the activities in the wrong order. Critical Path Analysis (CPA) calculates the longest path for planned activities until it reaches the end of the project. CPA takes a look at the earliest and latest instances that a certain activity can start and finish without making the project longer. There are instances wherein a schedule made using CPA is not realized accurately, this results to change in analysis and failure of the project.
E. Project Selection
The NPV is known as a method that uses the time value of money to increase long-term projects. NPV measures cash flows particularly the excess or shortfall of cash flows. The problem with NPV is it is not flexible for any issues after project decision. NPV also has a weakness in dealing with intangible benefits
Five stage plan
The first stage focuses on the initial stages of the implementation. This part focuses on the initial preparation for the new strategy. The resources for this activity includes different sources that can provide information on how the business can grow and achieve its goals; the other resource for this stage includes different notes and information that will provide the different changes that needs to be done with regards to the employees and the initiation process. In this stage Sony Ericsson will gather the needed resources.
The second stage of the implementation of the new strategy includes the planning stage. In this stage the effects of the new strategy have been known and are ready for implementation in the company.
In this stage the focus is on the full implementation of the new strategy. In this stage everyone concerned has been informed of the change in strategy and they start to feel the changes brought about by the new strategy. The resources for this stage are proper information and training tools for employees about the new strategy.
The fourth stage of the implementation will involve the control, validation and evaluation of the new strategy. The resource for this stage included informative materials that will be used to understand the changes the new strategy has done to the company and what are the current problems of the initiated project. The fourth stage will check how the project succeeded in its goal and how Sony Ericsson should change. The fourth stage of the project will take around one to two weeks.
The fifth stage will feature the evaluation of the implementation of the new strategy. To avoid failure, the implementation of the new strategy should be constantly checked and evaluated to see if it still performs according to standards. Evaluation will focus on checking how the firm has adjusted to the new strategy and how the firm has grown after changing its strategies. Evaluation will be used to determine the things or issues that should be changed within the new strategies and determine the next courses of actions that should be taken to achieve success. This stage will use one to two weeks.
The need for globalization
Whether to globalize and how to globalize have become burning issues for managers all over the world. This generalization contributed to creating the new strategies out of ideas that are competitive to the global economy. The new strategy was created by determining the global situation and determining what actions can be used to compete in a global economy.
Strategy development helps Sony Ericsson choose the best action for a certain instance. Sony Ericsson makes use of environmental analysis, experiences, studies and organizational learning to continuously develop its strategies. The challenge of learning can be expressed in attempts to engage with the paradox, uncertainty and complexity of management and organization. Organizational learning makes use of various methods to gather certain information that Sony Ericsson needs at a certain time. Organizational learning helps in determining the methods used by Sony Ericsson to learn and adapt to the changes done within the environment of the company. Sony Ericsson needs to make sure that they will identify newer strategies that are globally competitive. The newer strategies should help the company bolster its status and should be simple so that it would be easily implemented. The newer strategies should meet the goals of the organization.
The numbers are heading down due to the recession in economy. In Western Europe, spending-conscious buyers are not buying high-end models in favor of midrange alternatives that often are coupled with free with prepaid service contracts. And in emerging economies, which have been the growth driver for the mobile phone industry in recent years, handset owners are not buying high end handsets as they have to meet their rising expenses for food and fuel. This delay economy recovery especially lowers Sony Ericsson and Samsung revenues significantly. These mobile manufacturers' sales rely more on replacement sales in emerging markets than on first-time handset buyers.
Although it helped pioneer in high-end Smart-phones that acted like handheld computers, Sony Ericsson is also facing far more competition in this business segment today. While competitors have come up with products that have ability to compete with Apple's iPhone, Sony Ericsson has been slower in its reaction to changing market conditions. Sony Ericsson stuck primarily with “candy bar”-style handset designs as its rivals Samsung and LG have added clamshells, sliders, and touch screen devices to their handset offerings. So there are lot alternatives available, that is why so many people have switched. Unit growth is slowing down in the mobile market, but the average selling price per device is declining by around 10% every year. That's making hardware makers to move into the services business to deal with lower revenues and thus profits. Sony Ericsson needs keep up with Apple iTunes as well as Nokia's Ovi Internet portal now. Analysts suggest that the company should probably develop its own service offerings to keep up with market conditions, but first of all, it must straighten out its hardware issues. Sony Ericsson is now aware of its shortcomings and working to fix them.
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