Watch Out for

With the full con­trol of Sony Eric­s­son post ac­qui­si­tion, Sony of­fers the po­ten­tial to be one of the strong­est play­ers in the mo­bile de­vices space

Voice&Data - - ANALYSIS - Gyana Ran­jan Swain

It seems that the year 2011 is des­tined to give sur­prises, for good of course, to the mo­bile de­vices ecosys­tem with some game-chang­ing merg­ers and ac­qui­si­tions. First, Nokia sur­prised ev­ery­one early this year when it joined hands with soft­ware gi­ant Mi­crosoft to jointly de­velop next gen­er­a­tion mo­bile de­vices. Both the sink­ing ships in their re­spec­tive busi­ness cat­e­gories—mi­crosoft in mo­bile OS and Nokia in mo­bile phones—part­nered to re­vive each other and to bring back their lost glo­ries. And yes, the part­ner­ship has started show­ing some pos­i­tive re­sults. Sec­ond and most prob­a­bly the big­gest sur­prise was Google’s ac­qui­si­tion of Mo­torola’s mo­bil­ity divi­sion. The US based tele­com gi­ant’s de­vices busi­ness unit has been strug­gling for the last few years to cope up with the pace that the hand­set busi­ness is mov­ing glob­ally. Once a pioneer and leader in the in­dus­try, it now stands nowhere when com­pared to Ap­ple, Sam­sung, Nokia, HTC, or even Black­berry. With Google’s ac­qui­si­tion and look­ing at the strengths of the merg­ing par­ties, in­dus­try an­a­lysts ex­pect a ma­jor shake-up in the global mo­bile de­vices ecosys­tem in the com­ing time. The search en­gine gi­ant’s mo­bile OS Android has been hugely suc­cess­ful from the word go and its ac­cep­tance among the users and the ven­dors alike has been grow­ing phe­nom­e­nally and Mo­torola has been a pioneer in the hand­set busi­ness with plethora of in­no­va­tions and an ar­ray of patents. The fu­ture for both the com­pa­nies, though they are one now, looks quite amaz­ing.

Third and per­haps the most sur­pris­ing is the re­cent merger of Sony Eric­s­son with the Ja­panese elec­tron­ics be­he­moth Sony. The Ja­panese com­pany ac­quired 50% stake in Sony Eric­s­son which was ear­lier a 50-50 JV be­tween Sony and Swedish tele­com gear maker Eric­s­son. Now, Sony gets the en­tire con­trol of the hand­set com­pany.

Sony Eric­s­son was formed in 2001 as a merger of the un­prof­itable hand­set op­er­a­tions from Eric­s­son and Sony and has con­trib­uted some €500 mn to Eric­s­son’s profit. While the Swedish-ja­panese hy­brid en­joyed ini­tial suc­cess with its line of Walk­man-branded mu­sic hand­sets and cybershot cam­era phones, it has strug­gled to build sig­nif­i­cant mar­ket share world-wide. Like ri­vals such as Mo­torola Mo­bil­ity Hold­ings Inc and Nokia Corp,

Sony Eric­s­son has re­cently strug­gled to com­pete with Ap­ple in the fast grow­ing smart­phone mar­ket.

In a man­age­ment shake-up 2 years ago, Sony Eric­s­son ap­pointed Nord­berg as the CEO. It also de­cided to drop Sym­bian as its op­er­at­ing sys­tem in­tro­duc­ing a smart­phone strat­egy us­ing Google Inc’s Android plat­form. That move saw the com­pany re­turn to prof­itabil­ity, de­spite a de­cline in the mar­ket share.

Ac­cord­ing to the re­search firm Gart­ner, Sony Eric­s­son’s global mar­ket share was 1.7% in the sec­ond quar­ter this year, down from 3% a year ear­lier.

This merger is poised to shake up the mo­bile de­vice in­dus­try and has the po­ten­tial to give ex­ist­ing play­ers in the smart­phone area like Ap­ple, Nokia, Sam­sung, etc, a run for their money. Among nu­mer­ous rea­sons to an­swer how, these 2 fac­tors stand out. One, no one has con­sid­ered Sony as a com­peti­tor and Sony Eric­s­son was no more in com­pe­ti­tion; sec­ond, Sony has all the el­e­ments pre-ex­ist­ing in its legacy to be one of the tough­est con­tenders in the mo­bile de­vices ecosys­tem. Its lead­er­ship po­si­tion in hard­ware de­sign, soft­ware, au­dio, cam­era, gam­ing, and ex­pe­ri­ence in al­most all kind of com­mu­ni­ca­tion gad­get man­u­fac­tur­ing could give Sony more than re­quired con­fi­dence to be a se­ri­ous player in the ever-in­creas­ing mo­bile busi­ness space in the long run. Let’s an­a­lyze these fac­tors one by one.

Hard­ware De­sign

It’s be­yond doubt that Sony can make some im­pres­sive hard­ware for per­sonal com­mu­ni­ca­tion de­vices. The Sony Vaio range of lap­tops are per­haps next to only Ap­ple in terms of de­sign, look, and feel. Its Vaio Z, for ex­am­ple, is one of the best de­signed lap­tops avail­able in the mar­ket now. With a car­bon fiber and metal chas­sis and some great de­sign makes the lap­top stand out in the crowd. And mind you, Sony de­sign is cer­tainly not lim­ited to lap­tops.

On pro­vid­ing an au­dio de­vice in­built with a mo­bile phone, the in­dus­try would never for­get that it’s Sony that had in­vented the por­ta­ble au­dio mar­ket with its

This merger is poised to shake up the mo­bile de­vice in­dus­try and has the po­ten­tial to give ex­ist­ing play­ers in the smart­phone area like Ap­ple, Nokia, Sam­sung, etc, a run for their money

range of Walk­mans. Sony Walk­man was per­haps the first true por­ta­ble and pock­etable mu­sic sys­tem any­one would have used. Only af­ter a decade or more, Ap­ple came with ipod and changed the game for­ever. Though it was late to re­spond to the ipod in any se­ri­ous ca­pac­ity, the ca­pa­bil­ity of Sony can never be un­der­es­ti­mated. The cur­rent gen­er­a­tion of Sony Walk­man se­ries with the s-mas­ter dig­i­tal am­pli­fier are re­ally top notch and de­liv­ers sound qual­ity that beats ba­si­cally every­thing else out there. Sony also man­u­fac­tures some in­cred­i­ble head­phones and it can bun­dle those with its mo­bile phone the way HTC bun­dles beats head­phones. So, we can start to imag­ine, Sony build­ing a great look­ing mo­bile with great au­dio qual­ity and great bun­dled head­phones.

With Sony Eric­s­son’s Xpe­ria Play gam­ing cen­tric mo­bile phone ex­pe­ri­ence, with­out a sec­ond thought, we can imag­ine of a great gam­ing de­vice. Now, top it up with Sony’s Playsta­tion ex­pe­ri­ence and imag­ine a phone of that cal­iber. We are per­haps look­ing at the best gam­ing de­vice in the hori­zon and its un­think­able why Sony would not do that. I think we all know why; we went from a fea­ture phone based com­pany where Sony and Eric­s­son were bring­ing equal parts to the ta­ble and

For more re­lated ar­ti­cles go to voicen­data.com

moved to a smart­phone com­pany where Sony had a lot more to of­fer. Playsta­tion Suite on Android is cur­rently pretty empty. A pure Sony de­vice with a chip such as Nvidia Te­gra 3 could of­fer Playsta­tion Vita style per­for­mance.

Sony has great OLED ca­pa­bil­i­ties that they use in the cur­rent gen­er­a­tion Walk­mans and Playsta­tions. They too have the Bravia en­gine that has got some rave re­views for its per­for­mance in Sony Eric­s­son Xpe­ria Arc. One more im­por­tant thing to con­sider is that Sony makes per­haps the best mo­bile sen­sors in the world, the Ex­mor sen­sors. So, now we have a great look­ing, Walk­man en­abled, Playsta­tion ca­pa­ble, OLED phone with a killer cam­era.

Soft­ware and Con­tent

When Sony and Eric­s­son joined hands 10 year ago, they used to bring fea­ture phones and as the in­dus­try evolved to a smart­phone driven mar­ket, Sony Eric­s­son did not stay much away. It dumped Sym­bian and now Sony is pretty ex­pe­ri­enced with us­ing Android by it­self. The Sony tablets are hon­ey­comb and their new Walk­man range is based on Android too.

Fi­nally, last but not the least, we have the Sony con­tent. Sony has un­lim­ited mu­sic and video and they also own a mas­sive movie stu­dio. It would not be tough for Sony to ag­gre­gate con­tent, both au­dio and video, and come up with some­thing like Ap­ple’s itunes. Plus, Android mar­ket is al­ways open for its cus­tomers. It would be in­ter­est­ing to see how they come up with in­te­grat­ing con­tent to their de­vices.

How­ever count­ing po­ten­tials is one thing and lever­ag­ing those po­ten­tials on to an ex­e­cu­tion plan is an­other. The com­pe­ti­tion in the mar­ket place is fierce and Sony has a long way to go to pull off the ul­ti­mate phone but they have the po­ten­tial. Sony seem to be do­ing more sen­si­ble things ev­ery­day as they are in­te­grat­ing their com­pany bet­ter than ever and this pur­chase of Eric­s­son’s share of the Sony Eric­s­son ven­ture is only go­ing to strengthen things fur­ther.

gyanas@cy­ber­me­dia.co.in

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