Minus Ericsson, Sony to only make smartphones

MUMBAI: Sony Corp is all set to rebrand its mobile phones post the acquisition of Ericsson's share in the ten-year-old joint venture-Sony Ericsson. Asenior executive from the Japanese conglomerate, which also makes PlayStation video game consoles and Bravia TVs, said by mid next year, the Sony Ericsson brand will be phased out even as it looks to become a complete smartphone company. It would then sell its smartphones under the Sony brand.

The mobile handset maker, famous for its Walkman series phones, has been left behind in the race for market share in the last few years but is now banking on the Android-based smartphone segment to give it anew lease of life. Indian operations of Sony Ericsson will also follow the global strategy and by next year become a pure play smartphone brand as its line of feature phones makes an exit, said Kristian Tear, executive VP & head of sales & marketing, Sony Ericsson , while talking exclusively to TOI.

"A lot of planning goes into getting the branding right but we will be done by middle of next year. It will also mean that the marketing and advertising investments will go up. We haven't been as fierce as we were a few years back but we will step it up, refocus and invest more in brand-building in select markets and India is one of those markets," Tear added.

Sony Ericsson, which currently has about a 2% market share globally of the mobile handset market, underwent a management change about two years ago, got rid off the Symbian operating system in lieu of Google's Android and made the decision to focus only on the smartphone segment as losses mounted for the company . The Android platform, dominated by Samsung, now accounts for more than 50% of the overall smartphone market , according to Gartner, while Apple's iPhone has been the other big non-Android player in the overall smartphone category.

With full control of the company, the mobile phone maker is now looking to leverage more from its parent to help it bounce back. "Sony is the world's biggest entertainment company. We were earlier a 50-50 JV, but now that we are a wholly-owned subsidiary of Sony Corp. We expect to gain from its assets on the content , technology and brand side," he added.

The euro 6.2 billion Sony Ericsson will also integrate in some way at the sales and marketing level with its $86 billion parent company, although, with the acquisition still to get final approval, the process will only start next year, Tear said. Besides, gaining brand equity and assets of its parent, Sony Ericsson, which has 19% and 12% share of the Indian and global Android smartphone market, respectively, will increasingly focus on the valueend of the market.

Some industry watchers said this could mean foregoing a big chunk of the Rs 30,000 crore Indian handset market, still dominated by sub- Rs 3,500 phones. "Smartphone's still account for only about 6% of the overall market as low-cost devices rule majority of the Indian market. Although, the growth is happening rapidly at 30-40 % in the smartphone category it will be a while before we get to the adoption rate of the mature markets," said Anshul Gupta, principal research analyst, Gartner, a global information technology research and advisory firm.

The company is banking on the huge growth potential in the smartphone category to also push its profitability. "Last eight quarters have been good for us and we are proud of that. We went from focusing only on volumes to value but the big setback was what happened in Japan with the Tsunami, which put us back for this year quite a bit. But we are going in the right direction," Tear said. The target is to become the number one Android player in the smartphone segment, he added.