Sony Ericsson to Launch Eight New Phones
AMSTERDAM-World number four mobile maker Sony Ericsson aggressively expanded its line-up of low-cost phones on Tuesday, joining bigger rivals in the fight for customers in emerging markets.
The London-based joint venture between Japanese electronics maker Sony Corp. and Swedish telecoms equipment vendor Ericsson unveiled eight new phones, four of which would be at the low end of the price scale and four higher-priced models.
The company said it was launching two new Walkman music phones and two Cybershot digital camera phones as well as the four low-end phones.
The low-cost phones, with color screens and two of which have a basic digital camera, will be available in the second quarter of 2007.
The company has a policy to sell devices with features and prices slightly above those of its competitors.
Sony Ericsson's head of Nordic operations, Johan Mathson, said he expected the four basic phones to sell somewhere between 50 and 100 euros, well above models priced as low as $30 and $40 from Motorola.
European head of marketing Ben Duffy said Sony Ericsson would not go as low as $40 at the launch.
Sony Ericsson is the fastest growing mobile phone vendor in the global top five as a result of its success of its Walkman and Cybershot phones. It said in statements on Tuesday it has sold 20 million Walkman phones to date and 4.5 million Cybershot phones since the recent introductions.
The company had a fourth-quarter global market share of 8.7 percent, up from 6.6 percent in the year-ago period.
While Sony Ericsson has focused mainly on the segment of higher value phones, its bigger rivals Nokia, Motorola and Samsung battled it out in emerging markets with low-cost phones, pushing down the average price per phone and in the cases of Motorola and Samsung also resulting in lower profit margins.
Sony Ericsson, which is now the second-most profitable phone maker behind Nokia as a result of its focus on expensive, high-margin phones, has said it will no longer stay on the sidelines in this battle and that it wants to become the world's third biggest mobile phone vendor.
Nokia, with its 35 percent market share and superior profitability, has shown that large scale creates an important competitive advantage.
Sony Ericsson last week said it will start producing phones in India to cater to the needs of customers in that market.
Analysts were not too concerned about declining profit margins as a result of the new phones.
"They deliver according to their strategy, with good balance and control over growth and good profitability. The product portfolio is going gradually toward low end and therefore neither ASP (average selling prices) nor margins should come down significantly," said analyst Mats Nystrom at SEB Enskilda.
The Toronto Wireless User Group is a member of the Oreilly User Group Program.
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RESOURCE:
http://www.torwug.org/Articles/newsletters/Feb7_2007/ar_01.asp
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