Sony Ericsson

Mobile interface developer gives up the ghost

Paul Rasmussen — Wed, 07 Jan 2009 12:01:46 -0500

The long anticipated demise of mobile interface developer UIQ took place this week when the company filed for bankruptcy in a Swedish court. Motorola and Sony Ericsson, joint owners of UIQ through a Dutch holding company, decided to withdraw their financial support at the end of December 2008. More than 200 employees will lose their jobs.

The writing was on the wall for UIQ when its platform was integrated, together with Nokia' Series 60 solution, into the Symbian Foundation's new royalty-free, open-source platform. Motorola announced at the time it would no longer use the UIQ platform but would concentrate instead on other solutions such as Android and Windows Mobile. UIQ had enjoyed some success over the last six years, being widely used by Motorola and Sony Ericsson in handsets ranging from entry level consumer devices to smartphones. However, as UIQ's former chief executive Johan Sandberg pointed out, the company's main, if not only, income source was royalty fees on its intellectual property. Once the IP became free the main business of UIQ disappeared. "Effectively, we didn't have anything to do anymore," Sandberg commented.

For more:
- go to Silicon.com and The Register

Related stories:
Motorola and Sony Ericsson pull UIQ plug
UIQ files for bankruptcy

Economic problems impact mobile phone market

Paul Rasmussen — Wed, 26 Nov 2008 12:06:44 -0500

In the third quarter of 2008 the percentage growth in mobile phone sales worldwide declined to less than half that achieved in the same period in 2007. According to Gartner's latest mobile phone market analysis, total sales were 309 million units in Q3, a six per cent increase on Q3 2007. The global economic crisis is the main factor impacting on sales.

Market leading manufacturers Nokia and Samsung held up well under the impact of the global economic downturn although the former experienced lower replacement sales in mature and emerging markets. The main effects of the economic problems were felt in the battle for the world number three position currently raging between Sony Ericsson, LG and Motorola. The Gartner report says Sony Ericsson emerged as the winner in the third quarter largely because of the problems being experienced by its rivals.

Mobile phone sales in Western Europe were 43.5 million units in Q3, down from 47.2 million units in 2007. A slowdown in replacement sales adversely affected market performance in the region and will continue to do so in the fourth quarter says Gartner. In Eastern Europe, although a number of countries including Russia, Hungary, the Ukraine and Romania were badly affected by the financial crisis, this did not translate into a downturn in mobile phone sales.

For more on this story go to Telecomredux and Cellular News

Related articles:
Financial crisis hits mobile phone market as Q3 growth drops
Mobile phone sales will reach 1.28B in 2008
Study: U.S. mobile phone sales down 13 percent

Alarm bells ringing at Sony Ericsson

Paul Rasmussen — Mon, 20 Oct 2008 14:02:17 -0400

The near €25 million loss reported by Sony Ericsson for its third-quarter has prompted the company's president into taking drastic action. The most notable will be the decision to slash the handset product portfolio by 20 per cent, followed by a consolidation in R&D activities and the possibility of further job cuts numbering in the thousands.

Sony Ericsson's president, Dick Komiyama, blamed the worsening economic climate in Europe for the company's woes as consumers purchased fewer mobile phones. "Consumer confidence is less almost day by day." This was reflected in the company reporting sales of €2.8 billion in Q3, down 10 per cent on the same period last year, with profitability also being hurt by a combination of price cutting and restructuring charges.

In an effort to put a positive spin on an increasingly gloomy picture, Komiyama said that he hoped Sony Ericsson could return to profitable growth in the second half of next year.

While analysts don't believe these problems are terminal for Sony Ericsson, the continued success of LG's handset division - with Q3 sales up 30 per cent, must cause extreme frustration within the Swedish/Japanese joint venture.

The company also revealed that it would no longer be supplying handsets to NTT DoCoMo, and in addition, due to skyrocketing development costs and sluggish sales in Japan, had withdrawn from a coalition led by DoCoMo to develop advanced handset technology.

For more on this story:
- go to the Financial Times and Mobile Today

Related articles:
Sony Ericsson says, "Cheerio!" to flagship store in London. SE story
Sony Ericsson denies Xperia delay rumors. SE story

Sony Ericsson rushes out new strategy as job cuts announced

Paul Rasmussen — Wed, 01 Oct 2008 12:06:55 -0400

As Sony Ericsson considers cutting its workforce by up to 2,000 employees--450 already have been served notice in the US--and rumours continue to circulate about Sony wanting to break up the partnership, the company's president, Dick Komiyama, has been hurriedly advising analysts on how the company can return to profitability.

Komiyama maintained that Sony Ericsson would continue to leverage the Walkman and Cyber-shot brands that it believes have been a considerable success so far. He also confirmed there would be greater focus on improving the user experience on its handsets, which would continue to differentiate the company in the market place. He pointed to its Capuchin service architecture and the Xperia X1 as two good examples of this.

However, Komiyama claimed the future for Sony Ericsson was in content, applications and services. The company's first step, which mimics Nokia and Apple, is with the launch of two new music services based on its existing PlayNow service. PlayNow Plus and PlayNow Arena will both offer a music download service drawing content from major record labels including Universal Music Group, EMI, Sony BMG and Warner Music.

For more on this story:
- go to Ovum

Related articles:
Sony Ericsson cuts 450 jobs in North America. SE job cut story
Sony Ericsson intros trio of new Walkman phones. SE handset story

Sony Ericsson: No Android-based phone--yet

Paul Rasmussen — Fri, 26 Sep 2008 12:55:40 -0400

Battling to retain market share and reverse its declining fortunes, Sony Ericsson has confirmed its strong interest in developing an Android-based handset, but admitted it is not in a position to do so today. However, as an indication of the company's interest, CTO Mats Lindoff said that Android was already being tested on a number of Sony Ericsson phones.

The company, which declined Google's invitation to join the Open Handset Alliance late last year, is preparing to launch its first Windows Mobile smartphone and would appear to be one of the more likely candidates to swiftly adopt Android as a third platform.

Sony Ericsson's president, Dick Komiyama, confirmed the company was studying the Google mobile operating system and said it was something it should look at as a potential application for the future. " So today I'm not saying that we will have Android but we are certainly interested in it and we are studying it."

Outsiders believe that, given Sony Ericsson's experience with Symbian and now the Windows Mobile operating systems, its engineers would have little difficulty in bringing an Android-based handset to market within months. What might constrain the company from taking this route are cutbacks Komiyama has implemented, including a headcount reduction of 2,000 jobs.

For more on this story:
- go to silicon.com and IT Proportal

Related articles:
Google's Android phone to capture 4 percent of market. Android story
Visa expands m-payment services via Android, Nokia. Android story

Nokia's No. 1 market position threatened by price-cutting competitors

Paul Rasmussen — Fri, 05 Sep 2008 13:21:14 -0400

The cell phone giant Nokia shocked the European and US financial markets with the announcement that its Q3 market share would reduce significantly. The company blamed this downturn on several factors including a decision not to compete on price with its major competitors and the slower-than-expected ramp-up of a mid-range device.

The UK division of Nokia accused Samsung and Sony Ericsson of aggressively cutting their prices simply to gain market share. The company's MD, Simon Ainslie, said that this level of pricing couldn't sustain a business, and pointed to a similar attempt several years ago by Motorola that ended in failure.

Samsung and Sony Ericsson have both targeted Nokia's prepay heartland with low-cost and mid-range handsets, and have gained share as a result, bringing them within three to five per cent of Nokia's No. 1 market position. Some operators, notably Orange, have reduced the number of Nokia handsets on offer, while O2 recently turned down the chance to resell the new N96 smartphone.

Despite this gloomy picture Nokia remains upbeat. The company maintains it is still targeting an increase in its device market share in 2008, and still expecting industry mobile device volumes to grow 10 percent or more from the approximately 1.14 billion units it estimated for 2007.

For more on this story:
- go to Cellular News and Mobile Today

Related articles:
Nokia's outlook for 2008 is good, market share is up. Nokia Q2 story
Nokia launches three N-Series smartphones. Nokia smartphone story

Ericsson reports plunge in Q2 profits

Paul Rasmussen — Fri, 25 Jul 2008 11:45:34 -0400

A fall of 70 per cent in its second quarter profits was reported this week by Swedish telecoms giant Ericsson. The company blamed the fall on the high cost of shedding staff and falling handset sales by its Sony Ericsson joint venture. Last week Sony Ericsson reported that its second quarter pretax profits were 8 million euros compared with 327 million euros a year earlier and announced plans to cut 2000 jobs worldwide. Ericsson reported that its net income fell to SEK1.9 billion (US$320 million) from SEK6.4 billion (US$1.07 billion) a year ago. Revenue rose 2 percent to SEK48.5 billion (US$8.1 billion) in the quarter. Gross margins were 37 per cent, down from 43 per cent in the same quarter in 2007. The decline was mainly due to a shift in business mix with a high proportion of new network buildouts. Sales in Western, Central and Eastern Europe, the Middle East, Africa and Asia Pacific were all down by varying degrees but sales in North and Latin America were up.

For more on this story:
- go to Cellular News and The Telecom

Related stories:
Ericsson profit drops 70%, but N.A. sales up. Article
Sony Ericsson issues profit warning. Article

Recession to hit Nokia and Sony Ericsson sales - iPhone unaffected

Paul Rasmussen — Wed, 16 Jul 2008 11:26:50 -0400

While the cellphone industry has largely sailed through previous market downturns, this latest turbulence looks set to hit both Nokia and Sony Ericsson hard, but leave Apple and its iPhone untroubled. Nokia seems likely to provide the biggest surprise when analysts expect the company to report its lowest quarterly revenue growth since 2004 later this week. The firm warned the market in April that the value of the cell phone market would decline in 2008 in euro terms, meaning average prices are falling more than volumes are increasing. Sony Ericsson, ranked as the #5 mobile phone maker, may report that second-quarter profits have been almost wiped out on declining sales of higher-priced handsets and delays to new products. The market expectation is that the JV will announce a significant decline in the Q2/07 profit number of €220 million, perhaps close to zero, with sales figures falling by around 10 per cent.

Gartner says it now expects overall handset growth to top out at 11 per cent for the year, down 4 per cent on the 15 per cent growth forecast it made earlier in the year when the economic outlook was somewhat rosier. Carolia Milanesi, a Gartner analyst, said, "The economic environment has started to negatively impact emerging markets as well as mature ones. Despite expecting a strong second half, we feel that the weakness of the first half has pulled the overall year growth down to 11 per cent." The lone bright spot, of course, is Apple, which released the new 3G version of its iPhone on Friday and sold 1 million units in the first three days. Many wireless analysts now predict that Apple will sell 10 million of the new devices by the end of the year. ABI Research predicts that handset sales for all companies will improve during the second half of this year, boosted by impressive product launches such as the recently launched iPhone 3G and the Samsung Omnia/Instinct.

For more on this story:
- go to Information Week and my-esm

Related stories:
Handset sales slowing in U.S. amid worsening economy. Handset story
TI sees weakness in handset sales. TI story

Sony Ericsson considers US$165M investment in Spice Mobile

Paul Rasmussen — Fri, 11 Jul 2008 14:28:05 -0400

Having initially opened discussions about a partnership arrangement, Sony Ericsson is now actively considering acquiring a majority holding in the Indian-based cell phone manufacturer, Spice Mobile, for US$165 million. Spice Mobile ships around 200,000 handsets per month to Indian resellers, while Sony Ericsson delivers around twice this volume into the country. If the negotiations are successful, then the combined volumes would lift Sony Ericsson into the number two position in India--overtaking Samsung, but still far behind Nokia which is thought to ship around three million handsets a month.

Sony Ericsson has been suffering financially in recent quarters as margins on its predominantly high-end cell phones come under pressure. This move to acquire a low-end handset maker has been suggested by market analysts as a necessary move if the company is to improve overall profit margin based upon shipment volumes.

For more on this story:
- go to Cellular News

Related stories:
Sony Ericsson ships 22.3M phones in 1Q. Sony Ericsson story
Sony Ericsson issues profit warning. Profit warning story