Sony Ericsson takes No. 2 position in RP

Sometime last year, Sony Ericsson ran into a "nice problem" in the region when demand for some of its products exceeded what it could supply. Its multimedia phones, particularly the K750i, K700 and Z520i, sold very well all the way to the fourth quarter of 2005 which helped Sony Ericsson to become the second best performing mobile phone company in the Philippines.

Based on recent data from Gartner Research, Sony Ericsson sold around the Asia-Pacific close to 3.1 million units in the fourth quarter of 2005 and a total of 11.3 million units throughout the year. These gave the Swedish-Japanese joint venture a 5.6 percent market share to secure the fifth place regionally and globally.

The Philippines, however, is an exception. During the said period, Gartner found in the Philippines a Sony Ericsson that "displaced Samsung from second position and challenged Nokia’s leadership."

The company’s performance in 2005 is a confirmation of how the joint venture between Sony and Ericsson has been optimized in terms of leveraging the two giants’ combined strengths in consumer electronics and telecommunications, says Dennis Manzano, general manager of Sony Ericsson Philippines.

To drive home his point, Manzano highlights the indubitable success of Sony Ericsson’s Walkman family of products which last year sold more than three million units after being in the market for barely a year.

In the Philippines, additional factors like continuous expansion of channels and greater brand awareness among consumers have helped the company carve its unique No. 2 market ranking.

With its continued efforts to expand its distribution network, Sony Ericsson Philippines ended 2005 with five concept stores, three distributors and some 1,500 organized channels.

"The last three years for Sony Ericsson have been very dynamic. We’ve seen an evolution in the marketplace wherein organized dealers were elevating their standards, professionalizing their stores, implementing very structured and systematic display stands, and investing a lot in the training of their frontliners and equipping them with the proper tools," says Manzano.

Aside from improving visibility and coverage, the growing channel network also helps expose more Filipinos to the Sony Ericsson brand.

"Brand awareness has increased tremendously in the country with more Filipinos now familiar with the Sony Ericsson brand," says Patrick Larraga, marketing manager of Sony Ericsson Philippines.

"Based on studies we conducted, Sony Ericsson is perceived to be a premium, top-market brand. What appeals to Filipinos to the brand is its certain aspirational aura that they equate with certain richness in terms of feature set," he adds.

New products

Today, Sony Ericsson has four product groups based on features such as the Walkman, imaging, essential, and enterprise. With these four product segments, Manzano says they are able to cover key market bases.

"This year, we will have a wider product lineup in order for us to have a phone for every segment of the market and specific models that appeal to the requirements of each individual," he adds.

In Europe last month, the company separately launched its sixth and seventh Walkman phones. The W950, unveiled during the 3G Congress in Barcelona, is a 3G phone that can store thousands of songs in its 4Gb of flash memory storage.

It was followed by the introduction in London of the W300i, a quad-band EDGE clamshell designed for the mass market. The W950 is due in the third quarter, while the W300i will start shipping in the second quarter.

For its imaging propositions, Sony Ericsson launched two weeks ago the K800i and K790i, the first handsets to carry the Cyber-shot brand.

With this new line, the company aims to create a new lifestyle of "imaging communications" that combines Sony Ericsson’s unique mobile applications and Sony digital imaging technologies.

Both the K800i and K790i have 3.2-megapixel digital cameras with Autofocus, Xenon flash and BestPic.

"BestPic is a Sony Ericsson patented technology which allows users to take in one shot at least a series of nine pictures in a time sequence – four pictures before and four pictures after the actual image is captured. With those nine images, the user can choose which ones to save," explains Manzano.

The new Cyber-shot phones are also among the very first to support mobile phone blogging. Sony Ericsson and Google have partnered to provide a pre-loaded blog application with a tight integration into the mobile camera and intuitive automatic set-up for consumers who don’t have yet a personal blog.

Icons leading to Google Web Search have been integrated into the phone user interface to provide easy access to the information that Google Web Search can provide.

"With the new Cyber-shot phones, users can take photos and have them automatically sent to their blog sites. We have created a new and direct medium for blogging," says Manzano.

The K790i (EDGE version) and K800i (3G version) will be available in the second quarter.

For the enterprise space, Sony Ericsson will introduce the P990i in the middle of the year. This 3G PDA/smartphone will support different push e-mail solutions, a two-megapixel on-board camera and wireless LAN, among others.

"Sony Ericsson has actually established well in the enterprise niche from our P800 to the P910i lines. Aside from the P990i, we will also introduce the M600i, a very slim 3G handset with full messaging solution," Manzano adds.

Although perceived as a premium brand, Sony Ericsson will continue to introduce units for the essential market or for those who want handsets with practical, if not entry-level features only.

For this segment Sony Ericsson will introduce the J100i with color screen and FM radio plus the single-icon browsing feature. Larraga says the J100i will be priced below P5,000.

Tough market

Gartner suggests that for Sony Ericsson to continue to grow it should increase its low- to mid-tier offerings to take advantage of the replacement cycle that will start in the emerging markets in late 2006 and 2007. Expanding more its retail channels should also help.

Manzano believes they are doing quite well even in the replacement market as he notices how more people now upgrade their handsets by buying a Sony Ericsson unit.

"People are getting drawn to alternative brands and Sony Ericsson seems to cut through. A case in point is the take-up for our more advanced PDA phones or smartphones," he says.

He acknowledges, however, that the local market has not become any less demanding even though it has matured. In fact, he says the market has become even more demanding.

"Gone are days when consumers are happy with a handset with a VGA camera. Now, they want high megapixel, high memory and instead of asking if it’s tri-band or not, they ask if it’s 3G," adds Manzano.

A great year

Global sales of mobile devices in 2005 exceeded all expectations and closed at 816.6 million units, according to Gartner. Nokia kept its strong lead after selling 265.6 million units, while Motorola followed with sales of 144.9 million handsets. Samsung, at third place, moved 103.7 million units. LG came fourth by selling 54.9 million phones. Sony Ericsson, at fifth place, sold 51.7 million mobile phones to end-users worldwide.

Manzano says the close to 52 million units they sold last year were practically double the volume that the company had in 2003. But with competition at neck and neck, much is required to make 2006 another great year for the company and preserve its much-coveted No. 2 position in the Philippines.

Asked how they’ll do it, Manzano replies: "Let’s put it this way, we are never complacent."