Crunch time for Sony Ericsson

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It is make-or-break time for Sony Ericsson, more than for most incumbent handset brands. Quality issues have dogged its handsets for the past year.

Analysts from CSS Insight recently expressed their concern, stating Sony Ericsson is the manufacturer they are “most worried” for due to the draining confidence in its products within the sales channel.

Its list of botched launches, undone in early production with various software glitches, is significant: the C905 at the start of 2009 and the flagship Satio in the Autumn.

These were important debuts for Sony Ericsson, and they misfired in their early stages. And retailers have complained of high return rates on much of its broader portfolio.

The trouble is magnified since new-breed manufacturer brands are ingratiating themselves with retailers and consumers, and taking share in the important smartphone space, principally Apple, BlackBerry and HTC.

Incumbent manufacturers have been forced to respond, and certain of them are starting to. Motorola, most notably, appears to have emerged from its wilderness years, thanks in large part to its willing association with Google’s Android operating system; the same means by which HTC has won fans.

Samsung, and LG to a lesser extent, appear like supremely efficient manufacturing operations, able to turn out disposable mass-market classics in little time. The smartphone market is tougher for them, and the rest of 2010 will go some way to show both of their capabilities in the space.

To an extent, Nokia faces the same response problems as Sony Ericsson, to cut its global cost base and figure a way to fight newer smartphone brands, except it appears better able to produce reliable kit. It also has the privileged burden of being global leader.

For its part, Sony Ericsson was swift to put right the Satio software errors, which saw the device pulled from Carphone Warehouse and Phones 4U shelves for a time. And its market share rose a couple of percentage points in the UK on its relaunch (with software update), attended by availability of its twin, the Aino.

But Vodafone has since pulled out of ranging the delayed X2 in the UK, leaving the device without a UK carrier, and its latest results show its share in the UK has fallen away marginally since, as it holds off BlackBerry-maker Research in Motion in fourth position among manufacturer brands in the UK.

New and reliable DNA
Sony Ericsson UK and Ireland managing director Nathan Vautier (pictured) is mindful of recent errors. “Of course you need to be very conscious of how quality issues impact on consumers. There is now a massive focus on quality throughout the company. It has to be in the DNA of the whole company and it is now front and centre,” he says.

“There’s a complete focus on ensuring the quality is right. The release of the W995 was a step in the right direction and the Satio, with the updated software, is also in a very stable position.”

Meanwhile, Sony Ericsson has found itself inclined to reposition itself from a marketing perspective. Its Walkman brand, pulled from Sony’s heritage portfolio half way through last decade to smashing effect, has been outpaced recently by Apple as music leader in the mobile hardware space.

Walkman has since dropped down into its lower-tier range, and a new marketing campaign with the tag line ‘make.believe’ has since launched to bring Sony Ericsson in line with the Sony product message.

Vautier sums up: “Last year we wanted to set the stage and be the leader in communication entertainment. We had to make and deliver that to market, which is what we did with Satio and Aino. That is still our core vision.”

UK and Ireland senior marketing manager Richard Dorman adds: “We conduct brand surveys within different markets, and our brand still resonates very strongly. There’s still a lot of hunger and passion from consumers for our brand.”

Five new devices
The next three months will go a long way to show how far Sony Ericsson has come to rebuild confidence within the trade.

Its Symbian-based Vivaz handset, which followed announcement of the X10 Android phone among its new line of ‘communication entertainment’ devices, launched the second week of March across all networks, showing both the esteem with which its phones are still held and also the good will the company has built in the UK through the mid-to-late ‘noughties’.

The X10 itself is finally due to hit the shops in early April, although Vautier still declines to give a date for its held-up release, nor network and retail partners.

Two smaller X10 variants – the mini and mini pro – will be released late in Q2. A variant of the Vivaz, the Vivaz Pro, an incarnation of the Vivaz, is also due out later that quarter.

Vautier remarks: “The feedback [to the handset launches] from Mobile World Congress in Barcelona was refreshingly positive from operators and retailers globally. We’re confident we’re bringing very good products to market. We’re sure our products will be seen for their high quality. The Vivaz launching and performing well will cement that.”

But how does Sony Ericsson guarantee it will not revisit old sores with this new collection of handsets?

Full article in Mobile News issue 460 (March 29, 2010).

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