Sony Ericsson’s press conference at Mobile World Congress last week disappointed quite a few people for having so few phone announcements in it. But it did have 1st details of the company’s revised strategy.
Expectations were set by last year’s bumper announcement of 9 new phones. But this year SEMC annnounced only two new phones, although it said that of course there are others due out this year that it was just not announcing that day including an Android device.
The two new phones are:
- W995 – video powered Walkman – a new multimedia slider top-end feature phone, familiar proprietary software, 8.1 MPixel camera, 2.6″ screen, good integration with Facebook and blogging software, with a range of ways for media to get into and out of the phone, due out in H1 2009
- IDOU – a new top-end smartphone, based on Symbian software, with a new Sony Ericsson user interface, 12.1 MPixel camera, 3.5″ 16×9 touch screen, due out in H2 2009
Both phones set out to unite Sony Ericsson experiences previously split between Walkman, Cybershot, messaging- and gaming-optimised devices. According to Steve Walker, VP of Product Portfolio, a significant segment of people liked the idea of the branded experiences but didn’t see why they had to choose one or the other. In doing this Sony Ericsson is following the path Nokia took with the N95 two years ago, later also trodden by Apple and Samsung.
This is not just a defensive move by Sony Ericsson. It is also consistent with the new strategy, which Sony Ericsson explained like this. The objectives are:
- secure its position and customer base
- find new revenue opportunities, especially with services
- sustain its brand position (a “loved” brand)
- evolve the brand to become “the communication entertainment brand”
The last bit is part of what SE now describes as “Entertainment Unlimited” in which communication and entertainment are not just 2 functions in the phone but, thanks to good integration, have a multiplier effect so that the whole is more than the sum of the parts.
Certainly. But it does incorporate the growing notion that social networking is like a social economy in which the more you share, the more you get back. You need to take an active part to get the most out of them, i.e. communications and sharing of content (entertainment) are tightly linked.
In practice SE plans to address this by:
- uniting the experiences into single devices
- improving the sharing of experiences by allowing easy up- and downloads of various forms of media
- broaden the connectivity by doing more with DLNA
On DLNA the company launched its MediaGo software which is aimed at upgrading the sharing experience in the home. It allows file transfer to and from your PC / server and takes care automatically of different screen sizes, DRM rights etc. It enables you to share media with your PS3 and other DLNA devices over WiFi, though details of this are not available yet.
MediaGo is apparently one output of a project called Sony United which runs across the various divisions of Sony and is aimed at pulling the user experiences together.
On services Sony Ericsson’s strategy will be to:
- be the best at integration with the handset
- provide backwards compatibility, so earlier phones can take advantage of new services
- collaborate with operators
It announced plans for a Summer launch of PlayNow Movies, a new subscription service allowing users to download movies through the PC onto the phone.
Analysis: In assessing this we need to remember that Sony Ericsson is in financial trouble. Although it has set out plans for saving money and is enjoying a good run with the X1 and C905 Cybershot, it was losing €11 per phone shipped in the last set of results.
I buy the “Communications Entertainment” notion and agree that consumer behaviour is pushing quickly in that direction, so Sony Ericsson is doing the right thing here. But it’s clear that other vendors are also onto this.
Having said that I buy it, I also believe that this direction will force all vendors into complete re-write of the core functions of the phone – the Contacts, Messaging, Calendar and Gallery at least. And I also think that re-writing these should bring a big change in the philosophy of the user interface (UI). In a later discussion Steve Walker broadly agreed with this line of thought, although current announcements give no clues about where Sony Ericsson is taking it.
It’s also good to start seeing more of the linkage with other parts of Sony Corp. Along with Samsung, Sony should be one of the big and agenda-setting players in home networking and DLNA, which it is not today.
Where I am less convinced is in seeing only top-end phones announced from Sony Ericsson. This year we’ll see the top end very crowded indeed and smartphone functionality pushing down the range. Sony Ericsson has not yet shown any response to this.
I also dug a bit deeper into the costs of running with multiple operating systems (its own OSE, Windows Mobile, Symbian and Android). Steve Walker’s response is that having a choice of these allows a company like Sony Ericsson to focus less R&D on the core of the OS, and more on the user experience.
That may be right, but Sony Ericsson now has its own UI on OSE (as well as the Sony cross-media bar), a different one on Windows Mobile, is developing a different one again on Symbian for the IDOU and will need something on Android to differentiate from the large number of expected Android launches later this year.
Is it wise to have 4 incompatible “differentiated user experiences” across different software platforms? Is there any move to harmonise them? What are the extra costs of developing and maintaining these (especially if we’re heading into a major re-design soon)? Not clear at this stage.
Sony Ericsson is still uncomfortably dependent on a few hit models, and has very little wriggle-room. It really cannot afford to put a foot wrong at this stage.