Sony Aims to Be World’s No. 3 Handset Maker
Sony6758.TO -1.75% Mobile Communications, the company formed from the 2011 breakup of Sony Ericsson Mobile Communications AB, wants to be the world’s third-largest handset maker by value of sales, according to the company’s head of sales and marketing.
Dennis van Schie wouldn’t specify when the Tokyo-based company expects to hit the ambitious goal, but he said it was “not in 10 years’ time, but a lot sooner.”
When asked what percentage of smartphones based on Google Inc.'sGOOG -0.43% Android operating system, probably the most competitive sector in telecoms, he hoped to capture, Mr. van Schie told The Wall Street Journal: “If we are going for the No. 3, it is 20% of the smartphone market by value.”
He said the company currently has about 6.5% to 7% of the market by value.
The aggressive target was the result, he said, of the changes within the parent company, Sony Corp., brought about by the management shift with the appointment of Kazuo Hirai as president and CEO of Sony on April 1, 2012.
“The whole industry has been saying, why did Sony not do what Apple did? Why did it take so long to break the silos? I can say the change in leadership and investments has led to the fact that silos are broken so we can become mobile-centric,” Mr. van Schie said.
He said the breaking up of Sony Ericsson Mobile Communications AB—the joint venture with Sweden’s Ericsson that ran from 2001 to 2011—meant that for the first time, the company has access to the full range of technology from the parent company.
“Even if we thought we were part of Sony, all the hard-core technological assets that were available—applications, services, the hardware, like the sensors—were not really made available to us.”
He said that, for example, Sony’s camera sensor was used by other handset makers, but Sony Ericsson only got it at the same time as all the other makers.
“It was not a competitive advantage at that time. Now it is. It clearly is.” He said that a new screen was developed for Sony’s TV business, and “six months later it was optimized for mobile.”
Sony Mobile’s highly ambitious strategy to sit atop the likes of rival handset makers like HTC Corp. or the up-and-coming threats from China, such as Huawei Technology Co. Ltd or ZTE Corp., rests on two pillars: Sony’s brand value, and its existing distribution network used to sell television sets and its PlayStation videogame console.
He said the company was focusing on the high end of the smartphone market, priced at €300 ($408) and up. “That is where the value is, that is where the money is,” and would “play to our strengths—the premium brand that Sony stands for.”
Mr. van Schie claimed that Sony was still a strong brand, even among younger buyers, but he admitted that its image had tarnished. “The older generation … knew Sony from the past and when it was sexy and hot,” but, he said, “across the world Sony still has a very strong brand awareness and brand recognition, which is premium and quality and design-lead.”
Given Sony’s entertainment portfolio, it was not surprising that Mr. van Schie said access to music and movies would be a key part of the offering, although he was not able to explain why he thought Sony’s attempts would be any more successful than content deals that many makers, such as Nokia and BlackBerry, have tried. It was noticeable that on his own Sony handset, Mr. van Schie had installed Spotify.
The second pillar of their strategy was distribution.
“Where we leverage—and this is a big change from the past—the sales and marketing infrastructure of Sony. For example, in India. I was responsible for product development on the technological side at Sony Ericsson. We had a team of 25, 30 people, and to get to the mom-and-pop stores out there in a massive, complex and vast country like India is very risky.
“Sony Electronics have 650 people on the ground. Over 10 years they have built this network for selling TVs, PlayStation, cameras. Now, when we merged … we suddenly see a massive growth in India.”
He also admitted that Sony has an issue in two very key markets: China and the U.S., where he admitted the company was “nonexistent or very small.” He said that particularly in China, the value of Sony’s brand would carry the company.
“Leveraging the fact that Sony China has a very strong and solid footprint in the market with a much wider coverage than [Sony Ericsson] had. We were only present in roughly 30 cities in China. Sony China is everywhere.”
http://blogs.wsj.com
Dennis van Schie wouldn’t specify when the Tokyo-based company expects to hit the ambitious goal, but he said it was “not in 10 years’ time, but a lot sooner.”
When asked what percentage of smartphones based on Google Inc.'sGOOG -0.43% Android operating system, probably the most competitive sector in telecoms, he hoped to capture, Mr. van Schie told The Wall Street Journal: “If we are going for the No. 3, it is 20% of the smartphone market by value.”
He said the company currently has about 6.5% to 7% of the market by value.
The aggressive target was the result, he said, of the changes within the parent company, Sony Corp., brought about by the management shift with the appointment of Kazuo Hirai as president and CEO of Sony on April 1, 2012.
“The whole industry has been saying, why did Sony not do what Apple did? Why did it take so long to break the silos? I can say the change in leadership and investments has led to the fact that silos are broken so we can become mobile-centric,” Mr. van Schie said.
He said the breaking up of Sony Ericsson Mobile Communications AB—the joint venture with Sweden’s Ericsson that ran from 2001 to 2011—meant that for the first time, the company has access to the full range of technology from the parent company.
“Even if we thought we were part of Sony, all the hard-core technological assets that were available—applications, services, the hardware, like the sensors—were not really made available to us.”
He said that, for example, Sony’s camera sensor was used by other handset makers, but Sony Ericsson only got it at the same time as all the other makers.
“It was not a competitive advantage at that time. Now it is. It clearly is.” He said that a new screen was developed for Sony’s TV business, and “six months later it was optimized for mobile.”
Sony Mobile’s highly ambitious strategy to sit atop the likes of rival handset makers like HTC Corp. or the up-and-coming threats from China, such as Huawei Technology Co. Ltd or ZTE Corp., rests on two pillars: Sony’s brand value, and its existing distribution network used to sell television sets and its PlayStation videogame console.
He said the company was focusing on the high end of the smartphone market, priced at €300 ($408) and up. “That is where the value is, that is where the money is,” and would “play to our strengths—the premium brand that Sony stands for.”
Mr. van Schie claimed that Sony was still a strong brand, even among younger buyers, but he admitted that its image had tarnished. “The older generation … knew Sony from the past and when it was sexy and hot,” but, he said, “across the world Sony still has a very strong brand awareness and brand recognition, which is premium and quality and design-lead.”
Given Sony’s entertainment portfolio, it was not surprising that Mr. van Schie said access to music and movies would be a key part of the offering, although he was not able to explain why he thought Sony’s attempts would be any more successful than content deals that many makers, such as Nokia and BlackBerry, have tried. It was noticeable that on his own Sony handset, Mr. van Schie had installed Spotify.
The second pillar of their strategy was distribution.
“Where we leverage—and this is a big change from the past—the sales and marketing infrastructure of Sony. For example, in India. I was responsible for product development on the technological side at Sony Ericsson. We had a team of 25, 30 people, and to get to the mom-and-pop stores out there in a massive, complex and vast country like India is very risky.
“Sony Electronics have 650 people on the ground. Over 10 years they have built this network for selling TVs, PlayStation, cameras. Now, when we merged … we suddenly see a massive growth in India.”
He also admitted that Sony has an issue in two very key markets: China and the U.S., where he admitted the company was “nonexistent or very small.” He said that particularly in China, the value of Sony’s brand would carry the company.
“Leveraging the fact that Sony China has a very strong and solid footprint in the market with a much wider coverage than [Sony Ericsson] had. We were only present in roughly 30 cities in China. Sony China is everywhere.”
http://blogs.wsj.com
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