Sony-Ericsson

Sony-Ericsson

Sony Mobile Communications
Subsidiary of Sony
Industry Telecoms equipment
Predecessor(s) Ericsson Mobile Communications
Founded October 1, 2001[1] (as Sony Ericsson)
February 16, 2012 (as Sony Mobile)
Headquarters Minato, Tokyo, Japan[2]
Area served Worldwide
Key people Kunimasa Suzuki
(President and CEO)
Bob Ishida
(EVP and Deputy CEO)
Products Smartphones
Mobile phones
Mobile music devices
Wireless systems
Wireless voice devices
Employees 7,500 (as of December 2010)[3]
Parent Sony Corporation
Website

Sony Mobile Communications (formerly Sony Ericsson Mobile Communications AB) is a multinational mobile phone manufacturing company headquartered in Tokyo, Japan, and a wholly owned subsidiary of Sony Corporation. It was founded on October 1, 2001 as a joint venture between Sony and the Swedish telecommunications equipment company Ericsson, under the name Sony Ericsson.[1] Sony acquired Ericsson's share in the venture on February 16, 2012.[4]

Sony Mobile Communications has research and development facilities in Tokyo, Japan; Lund, Sweden and Beijing, China.[5] Sony Mobile is the fourth-largest smartphone manufacturer by market share in the fourth quarter of 2012.[6] The current flagship device of Sony is the Sony Xperia Z1, a waterproof and dust-resistant premium smartphone featuring a 20.7MP camera.

Origins

In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition. This joint venture was named Ericsson GE Mobile Communications, later renamed Ericsson Mobile Communications as GE left the cooperation.

Ericsson had decided to obtain 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 (their other major customer) that production would be delayed for no more than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage.[7] Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as production of current models and the launch of new ones was held up.[8]

Ericsson, which had been in the mobile phone market for decades, and was the world's third largest cellular telephone handset maker, was struggling with huge losses. This was mainly due to this fire and its inability to produce cheaper phones like Nokia. To curtail the losses, it considered outsourcing production to Asian companies that could produce the handsets for lower costs.

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

Sony was a marginal player in the worldwide mobile phone market with a share of less than 1 percent in 2000. By August 2001, the two companies had finalised the terms of the merger announced in April. The company was to have an initial workforce of 3,500 employees.

2001 to 2010


Mobile phones

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 a built-in digital camera and colour screen, which were novelties at that time.

On March 1, 2005, Sony Ericsson introduced the K750i with a 2-megapixel camera, as well as its platform mate, the W800i, the first of the Walkman phones capable of 30 hours of music playback, and two low-end phones.

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 would have some of its mobile phones made in India, and that its two outsourcing partners, Flextronics and Foxconn would manufacture ten million mobile phones 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.

In 2007, the company's first 5-megapixel camera phone, the Sony Ericsson K850i was announced.

In 2008, Sony Ericsson released C905, the world's first 8-megapixel phone.

On May 28, 2009 at Mobile World Congress 2009, Sony Ericsson unveiled the first 12-megapixel phone, named Satio, which runs on Symbian OS 9.4.

Market situation

Following the creation of the joint venture, Ericsson's market share actually fell, and in August 2002, Ericsson announced that it would cease making mobile phones and end its partnership with Sony if the business continued to disappoint. However, in January 2003, both companies said they would inject more money into the joint venture in a bid to stem the losses.

The joint venture, however, continued to make bigger losses in spite of booming sales. The target date for making a profit from its first year to 2002 was postponed to 2003 to second half of 2003. It failed in its mission of becoming the top seller of multimedia handsets and was in fifth-place and struggling in 2005.

2007

Sony Ericsson struggled following the launch of Apple's iPhone in the third quarter of 2007. Its handset shipments fell from a high of 30.8m in Q4 2007 to only 8.1m in Q1 2011.[9] The company had made net losses in six of the 15 quarters and seen its cash reserves shrink from €2.2bn to €599m, after taking a €375m cash injection from its joint owners. The eclipse of the Symbian operating system, initially by Apple's iPhone, and then by Google's Android, has affected Sony Ericsson's position in the market.

2008

Sony Ericsson was overtaken by its South Korean rival LG Electronics in Q1 2008, its profits fell significantly by 43% to €133 million (approx. US$180 million), sales were falling by 8% and market share was falling from 9.4% to 7.9%, despite favourable conditions that the handset market was expected to grow by 10% in 2008. The joint venture announced another profit warning in June 2008[10] and saw net profit fall by 48% in Q2 2008, announcing that it would cut 2,000 jobs, leading to then-wide fears[by whom?] that Sony Ericsson was on the verge of decline along with its struggling rival, Motorola.[11] 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.

Reorganisation

In June 2008, Sony Ericsson had about 12,000 employees; then in late September the company launched a reorganisation to shed 2,000 positions,[12] after which it employed close to 10,000 people,[13] and then in 2009 announced 2,000 more job cuts.

On 29 September 2008, Sony Ericsson launched a cost-cutting programme which entailed 2,000 redundancies across the company. The UIQ centres in London and Budapest units were closed; UIQ was a joint venture with Motorola which began life in the 1990s. Thereafter, UIQ was gradually deprioritized.[12]

The initial announcement of the cost reduction programme also consisted of plans to close the Manchester unit with 160 staff; job cuts in the Durham, USA Research Triangle Park (RTP) research center with 450 employees; and Swedish R&D centres in Hässleholm and Kista with 750 and 80 people, respectively.[14] The Manchester software development centre was closed with 200 redundancies by November 21, 2008.[15]

2009 reorganisation

On 17 April 2009, Sony Ericsson announced a further 2000 jobs cuts in addition to measures from the year previous. At that time, the phone maker employs "close to 10,000" people and owns a 6% share of the global handset market.[13][16]

In November 2009, four facilities were being shut down: the Raleigh (Durham), North Carolina Birchwood (Warrington) in the UK, and Seattle and San Diego facilities in the United States.

Units retained from these cuts are four research centers in Beijing, Tokyo, Sweden and Redwood Shores, United States.

Other business

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.

2010 to present

On October 27, 2011, Sony announced that it would acquire Ericsson's stake in Sony Ericsson for €1.05 billion ($1.47 billion), making the mobile handset business a wholly owned subsidiary of Sony. The transaction's completion was expected to occur in January 2012.[21][22][23] At their keynote at the 2012 Consumer Electronics Show, Sony's Kaz Hirai announced that Sony Ericsson would be known simply as Sony Mobile Communications pending completion of the transaction. On January 26, 2012, the European Union approved the buyout.[24] On February 16, 2012, Sony announced it had completed the full acquisition of Sony Ericsson.[4] On January 7, 2013, Sony Mobile completed moving its headquarters from Lund, Sweden to Tokyo, Japan in order to fully integrate with its parent company.[25] The first Sony-only mobile was the Sony Xperia S along with launch of Sony Xperia U and Sony Xperia P at the 2012 Consumer Electronics Show. Sony Mobile Communications has decided to phase out all the feature (non-smart) phones by September 2012 and focus on smartphones segment.[26] On July 2, 2012, Sony announced it is buying Gaikai, a cloud service to support its expansion into the cloud gaming realm. Sony is paying a reported $380 million to acquire Gaikai.[27] The Sony Ericsson Liquid Energy Logo which was the hallmark logo used on Sony Mobile products up until the 2012 series of phones was replaced with a new signature power button design as the new design signature hallmark to easily identify a Sony phone which debuted with the 2013 series of Xperia mobile phones. At the 2013 Consumer Electronics Show the Sony Xperia Z and Sony Xperia ZL were announced.

Operations

In 2009, Sony Ericsson announced that it was moving its North American headquarters from Research Triangle Park, North Carolina to Atlanta. The headquarters move was part of a plan to reduce its workforce, then 10,000 employees, by 20%. As of that year, Sony Ericsson had 425 employees in Research Triangle Park; the staff had been reduced by hundreds due to layoffs.[28] Stacy Doster, a spokesperson of Sony Ericsson, said that the proximity to Hartsfield-Jackson Atlanta International Airport's flights to Latin America and the operations of AT&T Mobility influenced the decision to move the USA headquarters. Sony Ericsson will close the Research Triangle site.[28][29] On August 23, 2012, Sony announced heavy cuts of their work force in Lund, Sweden.

Products

For detailed information about Sony Ericsson and Sony Mobile Communications products, see list of Sony Ericsson products.

Current products

Sony Mobile's current products include:

Former products

  • BRAVIA range - launched 2007 in Japan. To date, five BRAVIA branded phones have been produced: Sony Ericsson (FOMA SO903iTV, FOMA SO906i, U1, S004, and S005[32]).
  • The Walkman-branded W series music phones, launched in 2005. The Sony Ericsson W-series music phones were notable for being the first music-centric series mobile phones. A notable feature was a 'W' button, which when pressed opens the media centre.
  • 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'. In February 2008, the series was expanded with the announcement of C702, C902 and C905 phones.
  • 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 for Symbian OS. The range was subsequently expanded with the M series and G series.
  • The GreenHeart range - first introduced in 2009 with the Sony Ericsson J105i Naite and C901 GreenHeart. Focused on an environmentally friendly theme, it mainly used eco-friendly materials and featured eco-apps.

Sales and market share

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

Calendar year Unit sales (millions)
2004 42[33]
2005 50[34]
2006 74.8[35]
2007 103.4[36]
2008 96.6[37]
2009 57.1[38]
2010 43.1
2011 34.4

Marketing campaigns

Social media

During 2010, in 11 months, Sony Ericsson's Facebook fan count rose from 300,000 to 4 million to become the 40th-largest brand on the social networking site. The company aims to capitalise on this fanbase and increase engagement by profiling these fans and matching them to dedicated content. It will also analyse the top commenters on the Facebook page and ensure engagement through special content and offering these fans the chance to visit Sony Ericsson offices.[39]

Sports sponsorship

As of 2011, Sony Ericsson sponsors the UEFA Champions League and the Sony Ericsson Open tennis tournament in Miami. According to the head of global marketing partnerships,[40] Stephan Croix, “our sport sponsorships allow us to promote our phones in a subtle and authentic way to our fanbase. Our promise to fans is to enrich their experience during the game but also before and after.”

See also

Companies portal

References

External links

  • Sony Mobile Blog
  • Sony Xperia SP and Xperia L

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