|Sony Ericsson (2001-2012)
Ericsson Mobile Communications
|Predecessor||Ericsson Mobile Communications|
|Founded||1 October 2001|
Number of locations
Number of employees
Sony Mobile Communications Inc. is a multinational telecommunications company founded on October 1, 2001 as a joint venture between Sony and Ericsson, headquartered in Tokyo, Japan and wholly owned by Sony. It was originally incorporated as Sony Ericsson, until Sony acquired Ericsson's share in the venture on February 16, 2012.
Sony Mobile has research and development facilities in Lund, Sweden; Beijing, China; Tokyo, Japan; and San Francisco, USA. Sony Mobile was the fourth-largest smartphone manufacturer by market share in the fourth quarter of 2012 with 9.8 million units shipped.
The current flagship device of Sony Mobile is the Sony Xperia XZ Premium, an Android smartphone that is water and dust resistant with an IP68 rating, has a Qualcomm Snapdragon 835 Chipset and a 19 MP 4K MotionEye camera with object tracking.
Ericsson had decided to obtain chips for its phones from a single source—a Philips facility in New Mexico. On March 17, 2000, a fire at the Philips factory contaminated the sterile facility. Philips assured Ericsson and Nokia (their other major customer) that production would be delayed for no more than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage. Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as production of current models and the launch of new ones was held up.
Ericsson, which had been in the mobile phone market for decades, and was the world's third largest cellular telephone handset maker, was struggling with huge losses. This was mainly due to this fire and its inability to produce cheaper phones like Nokia. To curtail the losses, it considered outsourcing production to Asian companies that could produce the handsets for lower costs.
Speculation began about a possible sale by Ericsson of its mobile phone division, but the company's president, Kurt Hellström, said it had no plans to do so. Hellström said, "Mobile phones are really a core business for Ericsson. We wouldn't be as successful (in networks) if we didn't have phones".
Sony was a marginal player in the worldwide mobile phone market with a share of less than 1 percent in 2000. By August 2001, the two companies had finalised the terms of the merger announced in April. Ericsson contributed a majority of the Ericsson Mobile Communications company, excluding a minor part spun off as Ericsson Mobile Platforms. Sony contributed its entire handset division. The company was to have an initial workforce of 3,500 employees.
Sony Ericsson's strategy was to release new models capable of digital photography as well as other multimedia capabilities such as downloading and viewing video clips and personal information management capabilities. To this end, it released several new models which had built-in digital camera and color screen which were novelties at that time. The joint venture continued to make bigger losses in spite of booming sales.
In 2005, Sony Ericsson introduced the K750i with a 2 megapixel camera, as well as its platform mate, the W800i, the first of the Walkman phones capable of 30 hours of music playback, and two low-end phones.
In 2007, the company's first 5-Megapixel camera phone, the Sony Ericsson K850i, was announced followed in 2008 by the Sony Ericsson C905, the world's first 8-Megapixel phone. At Mobile World Congress 2009, Sony Ericsson unveiled the first 12-Megapixel phone, named Satio.
In 2005, Sony Ericsson agreed to become the global title sponsor for the WTA Tour in a deal worth $88 million US dollars over 6 years. The women's pro tennis circuit was renamed the Sony Ericsson WTA Tour. Just over a month later on June 7, it announced sponsorship of West Indian batsmen Chris Gayle and Ramnaresh Sarwan. In October 2005, Sony Ericsson presented the first mobile phone based on UIQ 3, the P990.
On January 2, 2009, Sony Ericsson announced in Stockholm that it would have some of its mobile phones made in India, and that its two outsourcing partners, Flextronics and Foxconn would manufacture ten million mobile phones per year by 2009. CEO Miles Flint announced at a press conference held with India's communications minister Dayanidhi Maran in Chennai that India was one of the fastest growing markets in the world and a priority market for Sony Ericsson with 105 million users of GSM mobile telephones.
Sony Ericsson's handset shipments fell from a high of 30.8m in Q4 1999 to only 8.1m in Q1 2003. The company had made net losses in six of the 15 quarters and seen its cash reserves shrink from €2.2bn to €599m, after taking a €375m cash injection from its joint owners. The eclipse of the Symbian operating system, initially by Apple's iPhone, and then by Google's Android, has affected Sony Ericsson's position in the market. The company also struggled following the launch of Apple's iPhone in the third quarter of 2007.
Sony Ericsson was overtaken by its South Korean rival LG Electronics in Q1 2008. Sony Ericsson's company's profits fell significantly by 43% to €133 million (approx. US$180 million), sales falling by 8% and market share falling from 9.4% to 7.9%, despite favourable conditions that the handset market was expected to grow by 10% in 2008. Sony Ericsson announced another profit warning in June 2008 and saw net profit crash by 97% in Q2 2008, announcing that it would cut 2,000 jobs, leading to wide fear that Sony Ericsson was on the verge of decline along with its struggling rival, Motorola. In Q3 the profits were much on the same level, however November and December saw increased profits along with new models being released such as the C905 being one of the top sellers across the United Kingdom.
In June 2008, Sony Ericsson had about 8,200 employees, it then launched a cost-cutting program and by the end of 2009 it had slashed its global workforce by around 5,000 people. It has also closed R&D centres in Chadwick House, Birchwood (Warrington) in the UK; Miami, Seattle, San Diego and RTP (Raleigh, NC) in the USA; The Chennai Unit (Tamil Nadu) in India; Hässleholm and Kista in Sweden and operations in the Netherlands. The UIQ centres in London and Budapest were also closed, UIQ was a joint venture with Motorola which began life in the 1990s.
On October 27, 2011, Sony announced that it would acquire Ericsson's stake in Sony Ericsson for €1.05 billion ($1.47 billion), making the mobile handset business a wholly owned subsidiary of Sony. The transaction's completion was expected to occur in January 2012. At their keynote at the 2012 Consumer Electronics Show, Sony's Kaz Hirai announced that Sony Ericsson would be known simply as Sony Mobile Communications pending completion of the transaction. On January 26, 2012, the European Union approved the buyout. On February 16, 2012, Sony announced it had completed the full acquisition of Sony Ericsson. On January 7, 2013, Sony Mobile completed moving its headquarters from Lund, Sweden to Tokyo, Japan in order to fully integrate with its parent company. The first Sony-only mobile was the Sony Xperia S at the 2012 Consumer Electronics Show. Sony Mobile Communications decided to phase out all the feature (non-smart) phones by September 2012 and focus completely on the smartphones segment.
On July 2, 2012, Sony announced it was buying Gaikai, a cloud service to support its expansion into the cloud gaming realm. Sony paid a reported $380 million to acquire Gaikai. The Sony Ericsson Liquid Energy Logo, which was the hallmark logo used on Sony Mobile products up until the 2012 series of phones, was replaced with a new power button designed as the new signature hallmark to easily identify a Sony phone and this debuted with the 2013 series of Xperia mobile phones. At the 2013 Consumer Electronics Show the Sony Xperia Z and Sony Xperia ZL were announced, followed by the Sony Xperia Z1, unveiled during a press conference in IFA 2013, the Sony Xperia Z2 during the 2014 Mobile World Congress in Barcelona, Spain, and the Sony Xperia Z3 in IFA 2014.
On October 30, 2014, Sony announced that Senior Vice President of Corporate Planning, Finance and New Business Creation Department Hiroki Totoki will replace Kunimasa Suzuki as President and CEO of Sony Mobile. Communications with effect from November 16, 2014. Suzuki subsequently became the Group Executive of Sony Corporation after his departure from Sony Mobile Communications.
In the last quarter of 2015, Sony Mobile had the highest per-handset-profit and average selling price of all major Android handset manufacturers.
In 2009, Sony Ericsson announced that it was moving its North American headquarters from Research Triangle Park, North Carolina to Atlanta. The headquarters move was part of a plan to reduce its workforce, then 10,000 employees, by 20%. As of that year, Sony Ericsson had 425 employees in Research Triangle Park; the staff had been reduced by hundreds due to layoffs. Stacy Doster, a spokesperson of Sony Ericsson, said that the proximity to Hartsfield-Jackson Atlanta International Airport's flights to Latin America and the operations of AT&T Mobility influenced the decision to move the USA headquarters. Sony Ericsson will close the Research Triangle site. On August 23, 2012, Sony announced heavy cuts of their work force in Lund, Sweden. September 2014 Sony announced taking a €1.3 billion impairment charge on the Sony Mobile division and cutting another 15% of jobs - equivalenting about 1000 employees - at Sony Mobile.
In 2011, Sony Ericsson announced the first PlayStation Certified phone the Xperia Play which meant that it had access to PlayStation Mobile games. The previously released Sony Ericsson Xperia Arc, and Sony Ericsson Xperia acro became the next PlayStation Certified devices followed by the Sony Xperia S, Sony Xperia ion and other Sony Tablets.
Since 2012 all products by Sony Mobile have been in the Xperia range - launched with the Sony Ericsson Xperia X1 at the 2008 Mobile World Congress in Barcelona, which carried the Windows Mobile operating system with a Sony Ericsson's panel interface. The Xperia X10 model launched in 2010 features the Android operating system. In 2011 Sony Ericsson carried a range of mid and high-end Android smartphones all using the same SoC, only differentiating in form factor, screen size and multimedia capabilities. Although in 2012 the phones already carried the Sony brand on them, they were still (mostly) developed by Sony Ericsson, as can be seen from the green logo on the back of handsets like the Xperia S and Xperia T.
The line-up in 2013 brought an entirely different design of phones, first seen on the Xperia Z smartphone, and called 'OmniBalance' (roughly translated as 'balance everywhere') by Sony. In 2014 Sony stated to be focusing more on the high-end phone market and reducing the number of low and mid-end products. The first model launched in 2015 was the Xperia Z3+, featuring updated internals in a body similar to the Xperia Z3.
Sony (then Sony Ericsson) has been making Bluetooth enabled watches from as early as 2006. In 2010 the LiveView smartwatch was launched, featuring a colour OLED display that let the user view notifications and control the music player. The successors Smartwatch 1, Smartwatch 2 and Smartwatch 3 were launched in 2012, 2013 and 2014, respectively.
In 2014 a fitness tracking band, named SmartBand, was introduced. The device's data is accessed using an Android application named Lifelog, which presents statistics about their everyday activities. In 2015, a successor to the SmartBand was introduced, named SmartBand 2, which can track user's heart rate, movements, sleep, and the moments they are calm or excited.
Sony Mobile offers a wide range of applications, ranging from music and videos to camera and gaming apps. Some of Sony Mobile's most popular apps include:
Sony Ericsson posted its first profit in the second half of 2003. Since then, the sales figures from phones have been:
|Calendar year||Unit sales (millions)|
During 2010, in 11 months, Sony Ericsson's Facebook fan count rose from 300,000 to 4 million to become the 40th-largest brand on the social networking site. The company aims to capitalise on this fanbase and increase engagement by profiling these fans and matching them to dedicated content. It will also analyse the top commenters on the Facebook page and ensure engagement through special content and offering these fans the chance to visit Sony Ericsson offices.
Until 2014, Sony Ericsson / Sony Mobile sponsored the Sony Ericsson Open tennis tournament in Miami. According to the head of global marketing partnerships, Stephan Croix, “our sport sponsorships allow us to promote our phones in a subtle and authentic way to our fanbase. Our promise to fans is to enrich their experience during the game but also before and after.”
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