The statement follows Sony Ericsson’s announcement earlier in the week that it would focus on higher-margin devices. In short, the company wants to take Nokia’s crown in producing premium products that still command huge market share. The power of its twin brand name, and Sony’s expertise in consumer electronics, leave it with a better hope than many.
Sony Ericsson has said that it still wants to be the world’s largest mobile phone producer.
Sony Ericsson said on Thursday that it is standing firm on its commitment to become the world’s largest mobile phone manufacturer, despite its aim of targeting more niche markets. Sony Ericsson’s newer phones will be more expensive than the average device, with a view to bringing in higher profit margins.
However, the company is clear to stress that it is not aiming to be like Nokia’s new subsidiary, Vertu, and sell gold-plated handsets for $20,000. It has said it does not want to be seen as implementing a ‘Porsche’ strategy, believing the key to success still remains in high volume production.
Instead, the new phones will be like its T68, catering for the middle to top end of the market. The phone is a good indication of where Sony Ericsson wants (and needs) to be. It’s a triple band mobile phone with a full color screen – the first of its kind – with features including GPRS, Bluetooth and EMS. The device looks good, is user-friendly and is popular. But even if the rest of the new range lives up to the T68’s promise, can Sony Ericsson phones compete with Nokia?
As the market reaches saturation point, it seems Sony Ericsson’s move away from commoditized low-end devices towards upmarket phones is more out of necessity rather than innovation. However, Sony Ericsson could be in a better position than many of its rivals to steal some of Nokia’s 35% market share: it has branding on its side.
The Sony side of the venture needs to take advantage of its reputation for building quality consumer electronics devices and computers, and also its expertise in design and marketing. Ericsson, while producing good phones and dominating in handsets, has never managed to please consumers as much as Nokia. However, as the leading equipment vendor in the mobile industry, it has established highly effective relationships with operators – traditionally a weakness of Sony’s.
By pooling resources, Sony Ericsson could build a range of next-generation handsets that are superior in functionality. Even so, taking on the Finns will be an uphill struggle.