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Summary:

Sony Ericsson is hoping that a brand makeover can somehow heal its critically wounded handset business. The joint venture between Ericsson and Sony said today that it will adopt Sony’s “make.believe” tagline in its marketing campaigns to “reinforce its entertainment credentials” with consumers. The company promises […]

yari

Sony Ericsson Yari with gesture gaming

Sony Ericsson is hoping that a brand makeover can somehow heal its critically wounded handset business. The joint venture between Ericsson and Sony said today that it will adopt Sony’s “make.believe” tagline in its marketing campaigns to “reinforce its entertainment credentials” with consumers. The company promises a new logo and a “more open and questioning attitude” as well as a viral campaign in support of the new Aino, Satio and Yari phones this fall.

Rather than investing in slick new messaging, though, Sony Ericsson might consider making handsets that consumers actually want. The company posted a $299 million second-quarter loss in June on the heels of a $382 million first-quarter deficit. Meanwhile, its share of the worldwide handset market fell during the first half of the year to 4.7 percent from 5.4 percent, and its total number of shipped units slumped by more than 6 percent.

Sony Ericsson continues to pay the price for its inattention to the low end of the market and a lack of multimedia-friendly, messaging-centric phones. Once considered the premier manufacturer of music phones, Sony Ericsson has lost substantial ground to Apple and Nokia, among others. The company — like countless other players — aims to right the ship with a new app store for Java- and Symbian-enabled devices.

The OEM will target younger users later this year with the Yari, a gaming device that takes its cues from the Wii and allows players to use body movements to manipulate games. And the Aino will offer a remote-play feature that can run digital media content hosted on a Playstation 3 gaming console.

But Sony Ericsson’s only real hope for the long-term may be a PSP-branded phone that leverages Sony’s traction in the video game space. While the market for gaming-centric phones is questionable — see Nokia’s history with the Ngage — such a device could prove popular with a young, data-hungry mobile set. And it would be a better investment than a branding facelift.

By Colin Gibbs

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  1. Rather than PSP, I think Sony-Ericsson should leverage the Vaio brand — at least for smartphones. Now if they came out with a phone that actually were PSP-compatible . . . As for inattention to the low-end, who cares? There are no margins there. What does one gain? Leverage with carriers? Having no low-end product didn’t hurt Apple on that end. Instead, I’d argue that the big Moto/Nokia/S-E worry far too much about market share. Leave the low end stuff to South Korea and China and concentrate on the higher margin categories. Isn’t it better to be BMW than GM?

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  2. Nice, I mean these phones have the same voice functionalities that my Nokia 2100 had in 1995. So why exactly should I care? Given their stern refusal to upgrade the voice experience to IP (because tech progress might disrupt mobile operators business models) at least they should indeed move to an entertainment device and integrate with the PSP.

    Spot on.

    Only that environment would give them access to quality developers without giving out control to Google or Microsoft.

    Trouble is either they have been planning it for a long time or you won’t see squat for 2-3 years.

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  3. [...] GigaOm Why Sony Ericsson Is Living in a Land of Make.Believe . [...]

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  4. Problems with Sony:
    1) closed system; closed mind
    2) no software capability
    3) no internet capability

    Their only hope is to buy Palm. This gives them an OS, software capability but no internet capability (cloud services).

    Then they need to boot out all the people at the top and bring in an internet generation capable management team.

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    1. Runningthe Numbers Friday, September 4, 2009

      Palm is too expensive (about $4-$5 billion if any premium is paid) and runs a proprietary version of Linux. Better to “go Android” and join the VERY big crowd.

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  5. Having bought an Xperia X1(My third Sony Ericsson), I must say my exasperation levels hit the roof! I mean, if you are going to shift to a new platform like Windows Mobile 6.1, atleast ensure that all the great features from your older models viz. P990I, are present.
    Friends can’t believe it’s an SE phone because the sound is so bad.
    I have seen the entire phone literally die slowly to the point where only the touchscreen works (and this from a phone whose USP is the keypad and the Panels button)

    If this is how the top-end model fares, I only shudder to think of low-end users.

    I have stopped recommending SE anymore!

    Forget branding, just focus on retention of regulars!!!

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  6. Sony Ericsson handset seems to be end of the road. They tried to focus on making the phone as an MP3 player when its competitors were busy making video phone or touch phone. Their phones have small screen. I don’t they had mobile internet in their mind when they were developing phones.

    So SE phones need a drastic change or it will be in league of Motorola !!!

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  7. [...] It seems that Sony Ericsson’s adoption of the make.believe tag line has prompted at least some commentators to call again for it to release a PSP Phone: But Sony Ericsson’s only real hope for the long-term [...]

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  8. Michael A M Davies Friday, September 4, 2009

    It’s clear that there is actually a significant opportunity for a PSP Phone, when you look at the comparative numbers for the iPhone and iPod Touch as gaming platforms: http://blog.endeavourpartners.net/2009/09/04/is-a-psp-phone-just-make-believe/

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  9. [...] Colin Gibbs | gigaom.com) var infolink_pid = [...]

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  10. I said it when the first iphone came out and I will say it again now. Sony needs a psp cell-phone. It just makes sense. If they do that, they will be a very competive alternative to the iphone now while everyone else is still playing catchup. If they wait, they will lose that ground to the other cell phone makers trying despeatly yo dig into apple’s iphone share. But hte question of “why” hit hasen’t happened yet is simple: it makes sense, and sony’s managment does not pay attention to things that make sense. .

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