Sony Mobile Communications

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Sony Mobile Communications AB
Type Subsidiary
Industry Telecoms equipment
Predecessors 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 www.sonymobile.com

Sony Mobile Communications AB (formerly Sony Ericsson Mobile Communications AB) is a multinational mobile phone manufacturing company headquartered in Tokyo, Japan, and Lund, Sweden, and is 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; Chennai, India; Lund, Sweden; Beijing, China and Silicon Valley, United States.[5] Sony Mobile was the fourth-largest smartphone manufacturer by market share in the fourth quarter of 2012 with 9.8 million units shipped.[6]

The current flagship device of Sony is the Sony Xperia Z3, a smartphone with water and dust resistance, a Quad core 2.5 GHz Krait Processor, Qualcomm Snapdragon 801 Chipset, Android 4.4.4 OS, and a 20-megapixel, G Lens, Exmor RS, and BIONZ image processor powered, 4K camera.

History[edit]

Origins[edit]

In the United States Of America, Ericsson partnered with General Electric in the early nineties as Ericsson Mobile Communications (ECS), primarily to establish a US presence and brand recognition.

Ericsson had decided to obtain chips for its phones from a single source—a Philips facility in New Mexico. On March 17, 2000,[7] 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.[8] 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.[9]

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.[citation needed]

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.[citation needed]

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. Ericsson contributed a majority of the Ericsson Mobile Communications company, excluding a minor part spun off as Ericsson Mobile Platforms. Sony contributed its entire handset division. The company was to have an initial workforce of 3,500 employees.

2001 to 2010[edit]

Sony Ericsson logo used from 2001 until 2012

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 colour screen which were novelties at that time. The joint venture continued to make bigger losses in spite of booming sales.

In 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 2007 the company's first 5-Megapixel camera phone, the Sony Ericsson K850i, was announced followed in 2008 by the Sony Ericsson C905, the world's first 8-Megapixel phone.[citation needed] At Mobile World Congress 2009, Sony Ericsson unveiled the first 12-Megapixel phone, named Satio.

In 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, 1999, 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.

Annual net income or loss 2003 to 2009

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 1999 to only 8.1m in Q1 2003.[10] 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.

Sony Ericsson was overtaken by its South Korean rival LG Electronics in Q1 2008. Sony Ericsson's company's profits fell significantly by 43% to €133 million (approx. US$180 million), sales falling by 8% and market share falling from 9.4% to 7.9%, despite favourable conditions that the handset market was expected to grow by 10% in 2008. Sony Ericsson announced another profit warning in June 2008[11] 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 was on the verge of decline along with its struggling rival, Motorola.[12] 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.

In June 2008, Sony Ericsson had about 8,200 employees, it then launched a cost-cutting program and by the end of 2009 it had slashed its global workforce by around 5,000 people. It planned to cut another 1,500 jobs in 2002. It has also closed R&D centres in Chadwick House, Birchwood (Warrington) in the UK; Miami, Seattle, San Diego and RTP (Raleigh, NC) in the USA; The Chennai Unit (Tamil Nadu) in India; Hässleholm and Kista in Sweden and operations in the Netherlands. The UIQ centres in London and Budapest were also closed, UIQ was a joint venture with Motorola which began life in the 1990s.[13][14][15][16][17][18][19][20][21][22][23]

2010 to present[edit]

Sony Xperia Z2, released in 2014, is Sony Mobile's current flagship device

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.[24][25][26] 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.[27] 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.[28] The first Sony-only mobile was the Sony Xperia S along with the Sony Xperia U and Sony Xperia P at the 2012 Consumer Electronics Show. Sony Mobile Communications decided to phase out all the feature (non-smart) phones by September 2012 and focus completely on the smartphones segment.[29]

On July 2, 2012, Sony announced it was buying Gaikai, a cloud service to support its expansion into the cloud gaming realm. Sony paid a reported $380 million to acquire Gaikai.[30] 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 power button designed as the new signature hallmark to easily identify a Sony phone and this 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, followed by the Sony Xperia Z1, unveiled during a press conference in IFA 2013 and the Sony Xperia Z2 during the 2014 Mobile World Congress in Barcelona, Spain.

Operations[edit]

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.[31] 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.[31][32] On August 23, 2012, Sony announced heavy cuts of their work force in Lund, Sweden. September 2014 Sony announced taking a €1.3 billion impairment charge on the Sony Mobile division[33] and cutting another 15% of jobs - equivalenting about 1000 employees - at Sony Mobile.[34]

Products[edit]

A Sony Ericsson W200i mobile phone
For detailed information about Sony Ericsson and Sony Mobile Communications products, see list of Sony Ericsson products.

Current products[edit]

Since 2012 all products by Sony Mobile have been in the XPERIA range - launched with the Sony Ericsson XPERIA X1 at the 2008 Mobile World Congress in Barcelona, which carried the Windows Mobile operating system with a Sony Ericsson's panel interface. The Xperia X10 model launched in 2010 features the Android operating system. In 2011 Sony Ericsson carried a range of mid and high-end Android smartphones all using the same SoC, only differentiating in form factor, screen size and multimedia capabilities. Although in 2012 the phones already carried the Sony brand on them, they were still (mostly) developed by Sony Ericsson, as can be seen from the green logo on the back of handsets like the Xperia S and Xperia T.

The line-up in 2013 brought an entirely different design of phones, first seen on the Xperia Z smartphone, and called 'OmniBalance' (roughly translated as 'balance everywhere') by Sony.[35] In 2014 Sony stated to be focusing more on the high-end phone market and reducing the number of low and mid-end products.[36]

Former products[edit]

  • 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[37]).
  • 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[edit]

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

Annual shipments of units 2003 to 2009
Calendar year Unit sales (millions)
2004 42[38]
2005 50[39]
2006 74.8[40]
2007 103.4[41]
2008 96.6[42]
2009 57.1[43]
2010 43.1
2011 34.4
2012 34.3
2013 38.4
2014 *Unannounced Yet

Marketing campaigns[edit]

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.[44]

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,[45] 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[edit]

References[edit]

  1. ^ a b "Ericsson – press release". Cision Wire. Retrieved October 1, 2001. 
  2. ^ "Sony Mobile moving HQ from Sweden to Tokyo on October 1st". Sony Xperia Blog. July 5, 2012. Retrieved August 13, 2012. 
  3. ^ (Swedish) IDG.se – "3150 have been fired". Translate.google.com. Retrieved July 11, 2011. 
  4. ^ a b "Sony Completes Full Acquisition of Sony Ericsson". 
  5. ^ "Our design philosophy". Sony Mobile Communications. Retrieved March 10, 2012. 
  6. ^ "IDC says Sony sold 9.8 million smartphones in Q4; now ranks in fourth place". 
  7. ^ Latour, Almar (2001), A Fire in Albuquerque Sparks Crisis For European Cell-Phone Giants, retrieved 2014-01-24 
  8. ^ "Ericsson versus Nokia - the now classic case of supply chain disruption". husdal.com. Retrieved July 22, 2011. 
  9. ^ "When the chain breaks" (June 18, 2006). The Economist: A survey of logistics, p. 18.
  10. ^ "Financialinformation – Aboutus – Company – Corporate". Sony. Retrieved July 11, 2011. 
  11. ^ "Sony Ericsson issues second profit warning of the year, hopes to break even in Q2". Engadget. Retrieved July 11, 2011. 
  12. ^ "Sony Ericsson Profits Crash 48%". TrustedReviews. Retrieved July 11, 2011. 
  13. ^ "Sony Ericsson to close down unit in Manchester". cn-c114.net. 
  14. ^ Peel, Lilly (November 21, 2008). "UK redundancies reach 25,000 in just a week". The Times (UK). 
  15. ^ "China wins, Symbian loses in Sony Ericsson reorg". The Register. 
  16. ^ Neate, Rupert (January 21, 2009). "Ericsson to cut a further 5,000 jobs". London: Telegraph. 
  17. ^ "Sony Ericsson to Cut 2,000 More Jobs After Third Loss (Update3)". Bloomberg. April 17, 2009. 
  18. ^ "Sony Ericsson to lay off 2,000 more workers". ZDNet. 
  19. ^ O'Brien, Kevin J. (January 26, 2010). "With Profit Down 82% for Quarter, Ericsson Plans More Job Cuts". NY Times. 
  20. ^ "Sony Ericsson to close Kista development centre". The Local. 
  21. ^ "Sony Ericsson to shut down Chennai unit". The Hindu Business Line. 
  22. ^ "Four Facilities Closing and 2000 job Losses with Sony Ericsson". Phones Review. 
  23. ^ "Sony Ericsson to close RTP site". WRAL. 
  24. ^ "Ericsson: Sony to acquire Ericsson's share of Sony Ericsson". Yahoo!. October 27, 2011. Retrieved October 27, 2011. 
  25. ^ "Ericsson Sells Stake in Sony Ericsson to Sony". October 27, 2011. 
  26. ^ "Sony’s buying 50% stakes of Ericsson’s share in Sony Ericsson – worthy acquisition?". October 27, 2011. 
  27. ^ "EU mergers and takeovers (Jan 27)". Reuters. January 27, 2012. 
  28. ^ "Sony Mobile completes transfer of HQ to Tokyo". Xperia Blog. January 7, 2013. Retrieved January 21, 2013. 
  29. ^ "Sony to phase out feature phones by Sept". The Times Of India. May 23, 2012. Retrieved May 22, 2012. 
  30. ^ "Sony Buying Gaikai, Will Establish Its Own Streaming Content Service (Jul 2)". G4TV. July 2, 2012. 
  31. ^ a b Dalesio, Emery P (November 18, 2009). "Sony Ericsson closes NC, other sites as HQ moves". Associated Press. Retrieved November 18, 2009. 
  32. ^ Swartz, Kristi E (November 18, 2009). "Sony Ericsson moving North American HQ to Atlanta". The Atlanta-Journal Constitution. Retrieved November 18, 2009. 
  33. ^ http://www.reuters.com/article/2014/09/17/us-sony-outlook-idUSKBN0HC0EC20140917
  34. ^ http://online.wsj.com/articles/sony-net-loss-forecast-raised-higher-for-current-fiscal-year-1410935006
  35. ^ http://blogs.sonymobile.com/2013/02/08/behold-beauty-xperia-z/
  36. ^ http://www.xperiablog.net/2014/08/05/sony-comments-on-mid-range-xperia-review-focus-on-profitability-over-scale/
  37. ^ "SO906i". NTT docomo. 
  38. ^ "Gartner Says Top Six Vendors Drive Worldwide Mobile Phone Sales to 21 Percent Growth in 2005". gartner.com. February 28, 2006. 
  39. ^ "Sony Ericsson reports record shipments, sales and profits". sonymobile.com. January 18, 2006. 
  40. ^ "Record quarter caps a record year for Sony Ericsson". sonymobile.com. January 17, 2007. 
  41. ^ "Sony Ericsson sells over 100 million handsets in 2007". sonymobile.com. January 16, 2008. 
  42. ^ "Sony Ericsson reports results for fourth quarter and full year 2008". sonymobile.com. January 16, 2009. 
  43. ^ "Sony Ericsson reports results for fourth quarter and full year 2009". sonymobile.com. January 22, 2010. 
  44. ^ O'Reilly, Lara (March 3, 2011). "Sony Ericsson faces "universal appeal" test in social media". News. Marketing Week. Retrieved July 11, 2011. 
  45. ^ O'Reilly, Lara (March 22, 2011). "Sony Ericsson aligns sport sponsorships with smartphones". News. Marketing Week. Retrieved July 11, 2011. 

External links[edit]