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Sony Ericsson Mobile Communications AB

Type	Joint venture
Founded	3 October 2001
Headquarters	Head Office: London, United Kingdom Incorporated: Sweden
Key people	Hideki Komiyama (President) Anders Runevad (EVP)
Industry	Telecommunications
Products	Mobile phones Mobile music devices Wireless systems Wireless voice devices Hi-Tech accessories Wireless data devices
Revenue	€12,916 million (2007)
Net income	€1,114 million (2007)
Employees	9,400 (as of July 2008)
Parent	Sony Corporation (50%) Ericsson AB (50%)
Website	www.sonyericsson.com

Sony Ericsson is a joint venture established on October 3, 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector. Both companies have stopped making their own mobile phones.

The company's global management is based in Hammersmith, London, and it has research & development teams in Sweden, Japan, China, Germany, the United States, India, Pakistan and the United Kingdom. By 2007, it was the fourth-largest mobile phone manufacturer in the world after Nokia, Motorola and Samsung. The sales of products largely increased due to the launch of the Walkman and Cyber-shot series.

Recent performance

While Sony Ericsson has been enjoying strong growth recently, its South Korean rival LG Electronics overtook it in Q1 2008 due to the company's profits falling significantly by 43% to €133 million (approx. US$ 193.6746 million ¹), sales falling by 8% and market share dropping from 9.4% to 7.9%, despite favourable conditions that the handset market is expected to grow by 10% in 2008. Sony Ericsson announced another profit warning in June 2008² and saw net profit crash by 97% in Q2 2008, announcing that it would cut 2,000 jobs, leading to wide fear that Sony Ericsson is on the verge of decline along with its struggling rival, Motorola.³ In Q3 the profits were much on the same level, however November and December saw increased profits along with new models being released such as the C905 being one of the top sellers across the United Kingdom.

Sony Ericsson has, as of July 18, 2008, approximately 9,400 employees and 2,500 contractors worldwide. Hideki Komiyama is the president of the company and has been since November 1, 2007 when he replaced Miles Flint. The Corporate Executive Vice President is Anders Runevad.

History

Troubles in Ericsson's mobile phone business

In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition.

Ericsson had decided to source pon chips for its phones from a single source, a Philips facility in New Mexico. In March 2000, a fire at the Philips factory contaminated the sterile facility. Philips assured Ericsson and Nokia (the other major customer of the facility) that production would be delayed by less than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage. Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as both production of current models and the launch of new ones was held up.⁴

Ericsson, which had been in the cellular phone market for decades and was the world no. 3 cellular telephone handset maker was struggling with huge losses in spite of booming sales since 2000 due to this fire and its inability to produce cheaper phones like its competitor Nokia. To curtail the losses, it was thinking of outsourcing production to Asian companies that can produce the handset for lower costs.

Speculation had begun about a possible sale by Ericsson of its mobile phone division but the company's president said that it had no plans to do that. "Mobile phones is really a core business for Ericsson. We wouldn't be as successful (in networks) if we didn't have phones," he said.

Background of the joint venture

Sony was a marginal player in the worldwide cell phone market with a share of less than 1 percent in 2000. It was also struggling in this area with losses but wanted to focus more in this area. In April 2001, Sony confirmed that it was in talks with Ericsson for a possible collaboration in the handset business. This was soon after Toshiba and Siemens had announced plans in November 2000 to work together on handsets for 3G mobile networks.

By August 2001, the two companies had finalized the terms of the merger announced in April. The company was to have an initial workforce of 3,500 employees.

Early troubles

In spite of having aimed to be profitable in its very first year, Ericsson's market share actually fell and in August 2002, Ericsson said it would stop making mobile phones and end its partnership with Sony if the business continues to disappoint even as Sony said it was fully committed to the joint venture and wanted to make it a success. However, in January 2003, both companies said they would inject more money into the joint venture in a bid to stem the losses.

Sony Ericsson's strategy was to release new models capable of digital photography as well as other multimedia capabilities such as downloading and viewing video clips and personal information management capabilities. To this end, it released several new models which had built-in digital camera and color screen which were novelties at that time. The high-end P800 which featured a built-in camera and PDA attributes was successful and helped in turning around. The joint venture, however, continued to make bigger losses in spite of booming sales. Thus, it kept postponing its target date for making a profit from its first year to 2002 to 2003 to second half of 2003.

It even failed in its mission of becoming the top seller of multimedia handsets and was in fifth-place and struggling in 2003.

Turnaround

Beginning of the turnaround

In June 2003, Sony Ericsson said it will stop making CDMA cellphones for the US market and will focus on GSM which was and remains the dominant technology. It also slashed jobs in research and development in USA and Germany. In October 2003, it posted its first quarterly profit but warned that falling prices on phones and competition would make it difficult to stay in black. Sony Ericsson's recovery is credited to the success of the T610 model.

Following the success of its P800 phone, Sony Ericsson introduced the P900 at simultaneous events in Las Vegas and Beijing in October 2003. It was pegged as smaller, faster, simpler and more flexible than its predecessor.

In March 2004, Ericsson said it would try to block its rival Nokia from gaining control of Symbian, an industry consortium that makes operating software for smart phones.

In 2004, Sony Ericsson's market share increased from 5.6 percent in the first quarter to 7 percent in the second quarter. In July 2004, Sony Ericsson unveiled the P910 communicator with its integrated thumbboard, broad e-mail support, quadruple memory and improved screen.

In February 2005, Sony Ericsson president Miles Flint announced at the 3GSM World Congress that Sony Ericsson will unveil a mobile phone-cum-digital music player in the next month. It would be called the Walkman phone and would play music file formats such as MP3 and AAC.

Success with Walkman phones and beyond

On March 1, 2005, Sony Ericsson introduced the K750i with a 2 megapixel camera, the W800i, the first of the highly successful Walkman phones capable of doing 30 hours of music playback and two low-end phones.

On May 1, 2005, Sony Ericsson agreed to become the global title sponsor for the WTA Tour in a deal worth 88 million US dollars over 6 years. The women's pro tennis circuit was renamed the Sony Ericsson WTA Tour. Just over a month later on June 7, it announced sponsorship of West Indian batsmen Chris Gayle and Ramnaresh Sarwan.

In October 2005, Sony Ericsson presented the first mobile phone based on UIQ 3, the P990.

On January 2, 2007, Sony Ericsson announced in Stockholm that it will be having some of its mobile phones produced in India. It announced that its two outsourcing partners, Lextronic and Foxconn will be producing 10 million cellphones per year by 2009. CEO Miles Flint announced at a press conference held with India's communications minister Dayanidhi Maran in Chennai that India was one of the fastest growing markets in the world and a priority market for Sony Ericsson with 105 million users of GSM mobile telephones.

On February 2, 2007, Sony Ericsson acquired UIQ Technology, a Swedish software company from Symbian Ltd.. UIQ will remain an independent company, Miles Flint announced.⁵

On October 15, 2007, Sony Ericsson announced on Symbian Smartphone Show that they will be selling half of its UIQ share to Motorola thus making UIQ technology owned by two large mobile phone companies.

Success with Cyber-shot

Sony Ericsson have also had great success with their Cyber-shot brand. It was launched in 2005 by the K750 which was one of the most popular Sony Ericsson phones. The reason's were it had Memory Card capability, which was very novel then. The Cyber-shot became very popular very quickly, because unlike Walkman, which had a very good media package and a poor camera, it had a decent media viewing and good cameras.

In 2007 their first 5-Megapixel camera phone, the K850 was announced. It was very successful. They also announced the C905 in 2008, which was very important because it was the worlds first announced 8-Megapixel phone.

India operations is headed by Mr.Sudhin Mathur from the Gurgaon office. Regional offices are in West, South and East. Western region office is in Mumbai headed by Mr.S. perincherry and Mr.Chauhan. South operations are controlled by Mr.Madhoo Ramaswamy from Banglore office. Eastern India office is in Saltlake Kolkata headed by Marketing Manager Mr.Sudipta Pakrashi. Currently India has been announced as a region headed by Mr. Anil Sethi.

Types of phones

Main areas of interest

The Sony Ericsson K750i is one of the most successful Sony Ericsson products.

Sony Ericsson currently concentrates on the categories of: music, camera, business (web and email), design, all-rounder, and budget focused phones. Its four largest categories are:

• The Walkman-branded W series music phones, launched in 2005.
  The Sony Ericsson W-series music phones are notable for being the first music-centric series mobile phones, prompting a whole new market for portable music that was developing at the time. Sony Ericsson's Walkman phones have previously been commercially endorsed by pop stars Christina Aguilera and Jason Kay across Europe.
• The Cyber-shot-branded line of phones, launched in 2006 in newer models of the K series phones.
  This range of phones are focused on the quality of the camera included with the phone. Cyber-shot phones always include a flash, some with a xenon flash, and also include auto-focus cameras. Sony Ericsson kicked off its global marketing campaign for Cyber-shot phone with the launch of 'Never Miss a Shot'. The campaign featured top female tennis players Ana Ivanović and Daniela Hantuchová. On 10 February 2008, the series has been expanded with the announcement of C702 and C902 phones.
• The BRAVIA-branded line of phones, launched in 2007 Japan market only.
  Now, two mobile phones (FOMA SO903iTV and FOMA SO906i) uses BRAVIA brand. BRAVIA branded phone are able to watch 1seg terrestrial television.
• The UIQ smartphone range of mobiles, introduced with the P series in 2003 with the introduction of P800.
  They are notable for their touchscreens, QWERTY keypads (on most models), and use of the UIQ interface Platform from Symbian OS. This has since expanded into the M series and G series phones.
• The Xperia range of mobile phones, heralded by the Sony Ericsson XPERIA X1 on February 2008 at the Mobile World Congress (formerly 3GSM) held in Barcelona Spain , had opened the door for integration of Windows Mobile Operating System into Sony Ericsson powerhouse smartphones. XPERIA was the first trademark promoted by the Sony Ericsson as its own and is designated to provide technological convergence among its target user base

Phone series description

Naming convention

Current system

After the 2008 Mobile World Congress, Sony Ericsson announced their new naming system comprising of four characters, each character denoting the "Series", the "Range/Class", the "Version" and the "Form Factor" respectively.

"a" and "c" suffixes are used to denote models specifically for American and Chinese markets, respectively ⁶

Previous systems

Sony Ericsson has used three methods in the past of naming their mobile products:

• The most common format uses a total of five (or six) characters, eg. K750i.
  This format begins with a capital letter to denote the series of the phone (K750i). This is then followed by three numbers (K750i). The first number indicates the sub-series of the phone, the second indicates the amount of progression from the previous release, i.e. K700i to K750i, and the third number is always either a '0' or '8' and the letter '8' is used either to show a variation of the phone destined for a different market without a feature, eg. the W888 is a W880i without 3G, or it is used to separate phones which have identical specifications but the designs are different, eg. K610i and the K618i or k800i and the k810i. Finally, the lowercase letter at the end of the model name describes the market for which a product is intended; these are: a for the Americas, c for China, and i stands for an international version; there is also an 'im' suffix used for branding i-mode phones. Often the last letter is left out to describe the phone generically with no region specific branding.
• A newer format (which has only been used on one phone to date) uses a total of three characters, eg. P1i. It is believed that this format is intended for naming flagship models of each phone series due to the limited numbering combinations.
  It begins with a capital letter to denote the series of the phone (P1i). The number is used to indicate the amount of progression from the previous release (P1i) and the final lowercase letter, as explained above, describes the market for which a product is intended. Again, often the last letter is left out to describe the phone generically with no region specific branding.
• The oldest naming format uses a total of four characters, eg. T68i. This format continued from the naming scheme of the Ericsson mobile business and was only ever used once.
  This format begins with a capital letter to denote the series of the phone (T68i). The first number indicates the sub-series of the phone (T68i) and the second letter indicates the amount of progression from the previous release. The last lowercase letter indicates that it is an update of the previous model, i.e. T68 to T68i.

Another peculiar naming format was the one used in naming the Z1010; this format has not been used since the Z1010.

Furthermore, Sony Ericsson always give their phones codenames when developing. Mainly to keep the information secret and to prevent leaks. All codenames are girl names, and some have been taken from the female players of the Sony Ericsson-sponsored tennis tournament, WTA. A complete list of codenames can be found here.

Financial information

Sony Ericsson posted its first profit in the second half of 2003. Since then, the sales figures from phones have been:

• 2004: 42 million units^{citation needed}
• 2005: 50 million units⁷
• 2006: 74 million units⁸
• 2007: 101.3 million units⁹

Also, Sony Ericsson sold 60 million music enabled phones in 2006, including 17 million Walkman devices, underlining how its products are more popular than Apple's iPod. Apple sold 46 million iPods in 2006. According to the Swedish Magazine M3s issue 7/2006 Sony Ericsson is the best-selling phone brand in the Nordic countries, followed by Nokia.

According to the IT research firm Gartner, in the third quarter of 2008, Sony Ericsson became for the first time the third largest mobile phone manufacturer in the world after Nokia and Samsung, despite failing to improve significantly its market share (8.05% globally), and it is followed very closely by Motorola (7.98%) and LG (7.80%).

Compatibility

During the E3 Media and Business Summit, Feras Jad, Saudi Telecom representative showcased a Sony Ericsson phone using the PlayStation's XMB. A select group of phones are also said to integrate into PlayStation Home (final product)

During the announcement of Sony Ericsson K850, W960 and W910. Some review sites have shown that those mentioned phones sport a new media manager to replace the standard Sony Ericsson File Manager which possesses a UI that resembles the XMB interface found on Sony PS3 and PSP products. The mobile developer site confirmed from their spec sheets and white papers that the XMB media manager is standard to the phones running Java Platform 8 also known as A200 Platform.

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