Business | Technology
Sony Ericsson chief's bold plan
mobile phone maker seeks to do better in india, china and the US
- By Andrew Parkerand Maija Palmer, Financial Times
- Published: 00:32 February 16, 2008
Hideki "Dick" Komiyama, the new president of Sony Ericsson, is already making a big impression at the world's fourth-largest mobile phone maker.
In January, less than three months into the job, he set a target of becoming one of the top three handset manufacturers by 2011.
That bold statement of intent was a striking contrast with his predecessor, Miles Flint, who was reluctant to set a public deadline for expansion.
Flint's coyness was perhaps understandable, given that Sony Ericsson missed its original target of becoming the world's largest mobile maker by 2006.
After struggling in the immediate aftermath of its formation in 2001, the joint venture between Japan's Sony and Sweden's Ericsson has enjoyed success by innovating in mobiles capable of playing music and taking photographs. Komiyama, a former head of Sony Electronics in the US, now wants to take Sony Ericsson to the next level, which is no small task given that competition between mobile makers is getting ever more cut-throat.
Chinese makers such as ZTE are unleashing stronger price competition, plus there are new entrants, led by Apple, the US computer maker, with its iPhone.
Some analysts think that Google, the US internet search engine, might join the fray. Mr Komiyama acknowledges the intensifying competition, and is also candid about Sony Ericsson's weaknesses.
Penetration
He says the company has "very sporadic penetration", pointing out that while it enjoys strong sales in western Europe, it must improve its position in India, China and the US.
He says this should be possible by manufacturing more mobiles that are tailored to the individual countries.
Last month he led a Sony Ericsson management conference in India to discuss how the company could increase its market share there.
Komiyama says Sony Ericsson can have a stronger performance by focusing on India's growing middle class.
For example, handsets equipped with radios will be an important addition for 2008, partly because, as Komiyama notes, India has many cricket lovers who want to keep up with the latest scores.
In China, Sony Ericsson is looking to improve its sales network after running into difficulties last year. For emerging markets generally, Komiyama says he will examine the case for making cheap mobiles - the price fell to $25 a handset last year - and suggests Sony Ericsson might do so within three years.
Having spent more than half his working life in the US, Komiyama is keen to make progress in what is the largest western market.
That progress may be limited in the short term as Sony Ericsson plans to stick with its strategy of only making mobiles that are suitable for two of the four largest US mobile operators.
Sony Ericsson manufactures phones based on GSM and WCDMA wireless technologies, which are used by AT&T and T-Mobile, but not Verizon Wireless and Sprint-Nextel.
Its sales strategy should improve in the medium-term when Verizon moves to LTE wireless technology, which is closely related to GSM and WCDMA.
Last week, Sony Ericsson unveiled the X1, a new phone that looks set to be regarded as a response to the iPhone. It is the first handset under Sony Ericsson's first sub-brand, Xperia.
Like all the handset makers, Komiyama sees a big opportunity for growth by selling mobiles that make the wireless internet a worthwhile experience.
Sony Ericsson is beefing up its PlayNow internet services portal, which allows consumers to download music and games.
Komiyama says the portal is not expected to generate significant revenue but should allow Sony Ericsson to further customise its phones and deepen relationships with mobile operators.
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