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Sony Ericsson Mobile Communications is one of the largest mobile phone manufacturers in today’s market. It was established October 2001. It was ranked as the sixth largest mobile phone corporation in 2005 by the market research company Gartner. It is a 50:50 joint venture between Ericsson AB and Sony Corporation. Sony Ericsson had 5000 employees worldwide in 2005 and the headquarters is located in London. Their R&D departments are located in Lund (Sweden), London, Japan, China and US (Sony Ericsson, 2005). The collaboration between Ericsson and Sony started with the aim to provide the best mobile solutions, through combining Ericsson’s strong position within mobile technologies and Sony’s expertise in consumer electronics (Ericsson, 2005).
At the time of the merger, both Ericsson and Sony faced problems within their mobile operations. Ericsson’s market share went down to a low 10,7% in 2000, while Sony only had 10% market share in Japan and a mere 1-2% worldwide. However, Ericsson was the market leader within mobile technology infrastructure, while Sony had a strong position within multimedia consumer electronics (regarded as important for the coming 3G of mobile handsets). The new venture was created in an attempt of releasing some of these synergies. (The Advanced Semiconductor Magazine, 2001)
The new venture employed 1000 employees from Sony and 2500 from Ericsson (The Advanced Semiconductor Magazine, 2001), and was rated the 5th best management decision in 2001 by Sunday Business. The expectations to the merge were high (Wheatley, 2001). But Sony Ericsson lost US$136m during the period October- December in 2001, and continued to disappoint the stakeholders during 2002 (Financial Times, 2002). The global market for mobile phones stagnated in the same period due to the saturation of the market. The new phones with imaging functions and digital cameras were not picked up by the market as fast as expected, as well as difficulties and delays in the next-generation services (Brown-Humes & Budden, 2002). Sony Ericsson’s first line of mobile phones did not provide the design originality necessary or enough new function in order to be successful, and the handsets were perceived to be too expensive (EE Times, 2002). As a result, Sony Ericsson’s market share sunk to 5.4% and the company was in need of repeating capital injections throughout 2002 (Financial Times, 2002, Sep 5).
Sony Ericsson’s aim was originally to be the number one provider of mobile handsets within five years, and focused on “haute-tech�? fashion and their mobile phones as style icons (EE Times, 2002). In 2002 they released T68, the world’s first colour screen mobile phone (Brown-Humes & Budden, 2002). Sony Ericsson's financial performance improved with the introduction of the 3G phones, and could report their first profit in late 2003 (Freedman, 2004).
Sony Ericsson sold 42.3 million mobile phone units in 2004, and is likely to increase this number in 2005. They shipped 11.8 million units in Q2, 2005, an increase of 14% compared to Q2 in 2004. Sony Ericsson has a wide range of mobile phones on the market, but is known for more expensive phones on the higher end of the market. (Sony Ericsson, 2005)
Sony Ericsson focused on digital camera phones in 2004. Many Sony Ericsson phones have today 1.3 mega pixel and a 4x digital zoom (Sony Ericsson, 2005). This is equal to a standard digital camera, and makes it possible to produce high quality prints from the mobile phone (Armstrong, 2004). The focus on digital camera phones resulted in phones such as the S700. S700 has an integrated 1.3 megapixel digital camera, with 8x digital zoom. The phone is also provided with other imaging functions like the picture gallery, picture effects, wallpaper animation, picture phonebook, and photo light. The mobile phone user can share the pictures with other media or mobile phones with the help of BluetoothTM and Memory Stick DuoTM. (Sony Ericsson, 2005)
The focus for Sony Ericsson in 2005 is on music. Sony Ericsson made use of Sony’s old brand WalkmanTM and released the WalkmanTM phone in Q3 in 2005 (Rhoads & Wingfield, 2005). The WalkmanTM phone provides a fully integrated music application which makes it possible to download, organise and navigate music. Mobile phones playing music and FM radio have been on the market for some time, but there have been several problems with these phones. The battery and memory capacity tended to be insufficient in order to compete with MP3 players. However, by launching a mobile phone constructed for music, these problems have been solved. In addition to this, the new WalkmanTM phone model has real stereo quality sound and will most likely be able to compete with MP3 players (Rhoads and Wingfield, 2005). Sony Ericsson introduced W600 and W800 to the market in Q3 2005. They both have a digital music player, FM radio RDS, CD ripping software, Mega BassTM, Media Player, USB plug and Music DJTM, to mention some features. They are also equipped with digital cameras and multiple games.
Sony Ericsson is also providing additional devices to extend the utilisation of the mobile phone, such as the BluetoothTM Media Center MMV-200. MMV-200 is a home entertainment convergence device which communicates with the mobile phones via BluetoothTM. It enables the content on the mobile phone, such as music, pictures and so on, to be transferred to the TV or home stereo (Sony Ericsson, 2005).
Sony Ericsson’s vision states that they aim on being at the forefront of innovation (Sony Ericsson, 2005). Sony Ericsson expects to gain momentum through the development of the 3G market (Freedman, 2004).
As a part of their marketing campaign to promote Sony Ericsson and their WalkmanTM Phone, Sony Ericsson will be sponsoring various music events such as the tour of Jamiroquai (Marketing UK, 2005) and the Ibiza Rocks concerts (Marketing Week, 2005)
Sony Ericsson is targeting users of Nokia and portable music players as future prospects for their business. Their aim for 2005 is to sell 720 million units. (Business World, 2005)
See also
References
External links
Sony Ericsson Mobile Communications
Yahoo – Sony Ericsson Mobile Communications company profile
Club Sony Ericsson
--Kristine Bjoernstad 21:13, 1 Sep 2005 (EST)
