Defending the crown

Sony Ericsson picked up the two big manufacturer prizes at the Mobile Awards last week, and on Thursday it unveiled three new handsets which suggest it will continue to pick up prizes, plaudits and sales well into 2008.

As far as handset announcements go, this latest launch was bolshy yet intelligent. Behind the launch of the new phones was an underlying message that Sony Ericsson is protecting its Walkman and Cyber-shot brands and is determined not to lose market share with the speed it has won it.

The three new handsets are all highly capable and desirable, but beyond the headline-grabbing five megapixels, 8GB and gimmicky 'Shake Control' is some real ingenuity in developing the software and usability features for both taking pictures and listening to music. Sony Ericsson also unveiled some less glamorous mid-range phones which will piggyback the hero products, as well as its biggest ever range of new accessories.

Two top-end Walkman phones and a new Cyber-shot device were unveiled together, in what seemed to be a clear statement of intent to the market. All three are 'flagship devices' for Sony Ericsson's two sub-brands, pushing the boundaries of phones as music players and compact cameras. It is difficult to imagine the three phones not being killer handsets when they launch at Christmas, but Sony Ericsson is acutely aware of the battle to seize credibility in the market as the strongest brand in music and photography. On the evidence of these new phones, it is difficult to see the likes of Motorola, Samsung, LG or even Nokia dislodging Sony Ericsson's position in music and photography. Although, we have yet to see the rivals' offerings, and some are wondering whether Sony Ericsson has shown its hand too early.

Award-winning
Sony Ericsson was crowned Manufacturer of the Year by the panel of operator sales directors and retail chiefs for producing handsets that create a buzz among customers and reach a broader range of users. When those handsets sold, they stayed sold (i.e there are low returns and customers kept them for a long time). The K800i encapsulated that and took the Handset of the Year crown at this year's Mobile Awards.

Sony Ericsson seemed to have judged consumers' tastes better than any manufacturer last year, creating the most exciting handset brand in the market and consistently producing handsets which were hits. Sony Ericsson's UK share has stabilised at 25%, taking it to the number two position, after the Walkman and Cyber-shot phones lifted the manufacturer's position from fourth place with just 9% share at the start of 2006.

Global marketing director, and former UK marketing chief, Ben Padley, told Mobile: 'Building on that foundation is the key. We want to take Cyber-shot and Walkman to the next level; we've built a financial success out of them. In terms of mobile music, we're the market leader, but we want to be in the top three globally.'

Everyone at Sony Ericsson understands the potential danger of 'doing a Motorola'; a phrase referring to the time Motorola briefly eclipsed Nokia in its RAZR-fuelled surge in 2005, only to see its market share collapse quickly when a string of uninspiring designs and user-experience concerns stalled sales. A similar, albeit not as dramatic, story could be told of Samsung, which has tried to build on the success of the D500 and D600, and seems to have found it tough to replicate the sales it enjoyed in 2004-2005.

Hence the increasingly sprawling range from Sony Ericsson; it has been barely a month since the manufacturer unveiled three new phones aimed at the fashion market. Is Sony Ericsson leaving its mould of killer handsets to pursue a similar costly adventure of broad portfolios that has forced some rivals to backtrack? 'We won't bring any handsets to market that aren't differentiated and give customers a genuine reason to buy,' says Padley.

Padley says he is happy with the size of Sony Ericsson's range at the moment, believing each device is delivering sales in its own right. Critically, in the subsidised UK market, the manufacturer is stretching the life cycles of top-end phones from free on £40 contracts, to £20 deals and pushing them into prepay, squeezing out all the commercial value before it is discontinued.

The new Walkmen
An obvious question is why bring out the W910 and W960? How will operators justify betting on both when they put their ranges together at Christmas?

Padley says: 'We've seen that there is a big market at the top end for music players, but there are two very different groups: the super-slim slider W910 is aimed at a younger customer, while the 8GB W960 is a Symbian device aimed at a more technical user.' He says the foundations are based on claiming the territory of music and photography, not simply through great handsets, but acting as an innovator by setting the benchmarks in customer experience.

Consumers will be able to skip forwards and backwards on albums and playlists with 'Shake Control', jerking the handset to the left or right. There are obvious comparisons to the Nintendo Wii, but Sony Ericsson's function lacks the compelling argument for having it. Sony Ericsson says this is its first incarnation, and users expect it to evolve.

New software has been built, displaying all the music on the PC and all the music on the phone in two clear chunks with a simple drag-and-drop system. Then there is the clever TrackID software: similar to the Shazam service, the phone will reveal the track, artist and album of a song playing nearby. It will also suggest similar songs. A service called m-buzz is being set up to develop new artists and a deal has been struck to bring music content onto Walkman phones from sister company Sony BMG. The potential of these developments as commercial successes is far from certain, but the name of the game for Sony Ericsson is about maintaining its brand position as the market leader in music.

Sony Ericsson's status as the Daddy in the mobile music space faces a frightening threat in the form of Apple's iPhone. This Christmas, both the W910 and W960 will go head-to-head with the most widely anticipated mobile phone in recent years, the touch-screen music device from Apple.

Apple iPhone
The prospect of Apple entering the market this year, and the established mobile manufacturers doing their utmost to keep Apple out, make for a fascinating six months. At the same time, operators such as T-Mobile, 3 and Vodafone are all trying to bring the internet to phones. Nokia has already set the market alight with the first major 'converged' device, the N95.

Sony Ericsson unveiled its take on converged handsets this week – not quite all the bells and whistles of the N95, but with its top-end devices, Sony Ericsson is giving a bigger reason than anyone else has to stop using a separate compact camera and music player.

Padley won't comment on the iPhone or the N95, other than a cursory comment about respecting all competitors, but he says: 'We're the ones changing the mobile music landscape, and how consumers will discover and experience music.'

Killing the compact camera
The threat to the compact camera from the camera phone was made two years ago when Carphone Warehouse chief Andrew Harrison issued a statement to the City, coinciding with abysmal post-Christmas results from camera retailer Jessops.

Sony Ericsson has produced a handset that the compact camera market must have known was inevitable, but must be extremely fearful of.

The K850's five-megapixel label is not necessarily the biggest concern for the compact camera market. It is designed as a compact camera and has all the features and tricks of a compact camera, such as an on/off button and a button that switches from taking photos, videos and playback. Like the Walkman phones, the K850 has a new menu system. Rather than confusing customers upgrading from the K800i, it gives a new depth of options on managing files and storage.

Padley says there have been practical developments to cash in on that much talked about web 2.0 social networking generation. 'For those younger people, their camera phone is their first camera. We've worked hard to make things like Facebook and blogging work out of the box.'

The device will also support standard miniSD cards for the first time, rather than the Sony
Ericsson-owned Duo Stick cards.

source via esato