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Sony Ericsson’s Path To Renewed Profitability

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Sony Ericsson’s President, Bert Nordberg, speaks to the FT at MWC 2010 in Barcelona about SE’s turnaround strategy. Nordberg intends to steer SE’s ship back into profitable waters by focusing SE on the most lucrative mobile market: the U.S. In order to do that SE it appears will plug the CDMA hole in its portfolio. SE has never had a strong presence in the mass market category and Nordberg confirms that SE is happy (out of necessity if not by choice) to cede that market to Nokia and the Asian manufacturers. SE will continue to focus on the mid to high tier segments.

A couple of interesting revelations by Nordberg. SE will not be launching a me-too app store but will instead rely on 3rd party app stores to distribute apps for its handhelds. I find Nordberg’s claim that SE does not have the resources to do its own app store very surprising. By not injecting itself between app developers and end-users with open wallets, isn’t SE giving up on a potentially lucrative recurring revenue stream.

Nordberg says SE is going to differentiate itself from other vendors by making sleek handhelds. But then so does every other vendor.  Another point of differentiation is SE’s relationship with Sony

Mr Nordberg said the user-interface on Sony Ericsson’s mobiles would be replicated on Sony’s laptops and televisions.

It will be interesting to see what that means in reality. SE is no doubt in a tough spot at the moment. SE’s product portfolio as it currently stands is full of holes. SE is reliant on outside entities for it’s software platforms and their phones (at least IMO) are not prized to sell in the volumes that SE requires them to sell. More importantly unlike the years past SE is struggling to find a hook in the consumer’s mind for its phones. Used to be music and photos. No longer the case.  The handsets that they will release over the next few quarters should tell us more about how SE plans to address this challenge.

Nordberg has his task cut out for him. He will have to use all his operational turnaround experience and complement that with sound strategy to rescue SE from the rough seas that it has led itself into over the past few years.


Written by Varma Chanderraju

February 14, 2010 at 11:13 pm

Posted in Mobility

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