‘Mobile integrated business’ strategy drives Sony Ericsson

Sony Ericsson Mobile Communications recently began local operations with a showcase of its latest mobile phones and a preview of upcoming units and special features. In this Q&A, Sony Ericsson general manager for Philippine operations Francisco Dennis Manzano tells more about the new company and what consumers can expect from Sony Ericsson mobile phones.

Q: Sony Ericsson Mobile Communications was established only last October. Can you comment on what Sony Corp. and LM Ericsson brought into this joint venture?

Manzano: LM Ericsson has actually been in the Philippines since 1994 while Sony Phils. Inc. started in 1997. Today, we are formally launching Sony Ericsson Mobile Communications. Our local office is a branch office reporting to Sony Ericsson Mobile Communications International AB in Sweden. There are currently 11 branches in the Asia-Pacific. Worldwide, we have offices in 100 cities employing over 4,000 people.

We are really focused on delivering exciting new services to people, not just delivering underlying technology enablers. In Sony Ericsson, we call this concept the "Mobile Integrated Business Model" and it drives our entire company from product development to marketing. We are passionate about bringing attractive products to the market, packaged together with ready-to-run applications and a selection of exciting content.

Q: How has your performance measured up in the first quarter of 2002?

Manzano: We posted 3.5 million euros (estimated $3.49 million) in global revenue and we have launched nine products since then.

Q: Are you setting up other regional offices? Where and why?

Manzano: We have presence in India, Thailand, Indonesia, Malaysia and Singapore, to name a few. The region presents great variations as a market. Indonesia, Thailand, India and China are all countries with enormous populations but still rather low mobile phone penetration. Subscriber growth is steadily increasing so we have high hopes for them. For the markets with high phone penetration like Hong Kong, we see a growing replacement market. In Japan, there is a great experience of applications and mobile telephony, an expertise we are building into our company. The market size warrants the establishment of local operations.

Q: Can you describe the current Philippine mobile phone market?

Manzano: There are about 13 million subscribers between two dominant mobile phone operators. The country experiences over 100 million text messages a day. Metro Manila understandably has the highest density of mobile phone users.

We have gone from voice to text and data over the last eight years. At present, we are now witnessing the growing popularity of Multimedia Messaging Service (MMS), which is another form of communication using this data. This specific service is made more exciting when viewed on color display phones. Subscribers are now customizing their handsets by using images to ID callers.

Q: What will be Sony Ericsson’s position and competitive edge against this backdrop?

Manzano: Sony Ericsson will lead through imaging, connectivity and entertainment. We were the first to launch GPRS color display phones with the T68i which promotes MMS. In entertainment, there are fun and games for all types of users and multimedia content. We are even supporting application developers in this area. For connectivity, we have the widest range of accessories and products promoting Bluetooth connectivity and interoperability between PCs and mobile phones. We will compete in the market with our products, which are open for all new applications and with our strategy of working with content providers.

Q: Sony Ericsson has established itself as a brand of high-end products. Will its second wave be positioned similarly?

Manzano: We cover all segments. Recently launched are the mass market phones such as the T200 and T300. For the mid-range, we have the T600 and the P800 Smartphone, a true multimedia messaging tool. These will be available by the last quarter of 2002 and will positively impact our market share.

Q: What is your strategy in competing in a "growing replacement market" in mobile phones?

Manzano: There are embedded and downloadable games, color imaging and MMS messaging across our product portfolio. We have content partnerships that will appeal to our users. Most of all, Sony Ericsson drives mobile phone imaging with utilities like the PC Image Editor, PC MMS Composer and Sony Style Imaging web album.

Q: How will your partnership with Sony as chief content provider impact local consumers? Any major promotions in movies, music and games soon?

Manzano: Yes. For one, the P800 will come bundled with a 3D graphical version of the Men in Black II game. We have tie-ups with Sony Pictures, Sony Music and Sony Digital Entertainment for content so there will be a lot of enjoyable features embedded and downloaded in our different models.

We also now have an agreement with Sony Web Portals around the world. These are designed for the Sony fans, who can have access to premium services around all Sony consumer products. The goal of these partnerships is to promote Sony Ericsson devices within this wider Sony community and to give consumers the opportunity to enjoy outstanding content and product services for their handsets. Via these sites, Sony Ericsson is continuing to establish new user habits such as downloading exciting imaging, MMS and entertainment content into their phones and storing their personal pictures on the Web.

Q: How will Sony Ericsson address issues of compatibility, pricing and the presence of more established players in the local market?

Manzano: Consumers and business users can enjoy more applications and improve their connectivity by connecting personal devices and linking them through mobile phones to the wider network. Bluetooth technology is the enabler to achieve connectivity and we have continued to build our market range of Bluetooth-enabled handsets with the T68i and P800. We have several Bluetooth accessories like headsets, handsfree and car handsfree kits.

Now that there are many Bluetooth-enabled products coming to the market, one of our challenges is to educate customers on these new applications and ensure that they can enjoy ready-to-run interoperability between products, straight out of the box. To do that, we are working with other leading device vendors in several application areas, as well as our colleagues across other Sony product divisions. We will also be exploiting opportunities to jointly promote the possibilities of Bluetooth connectivity to businesses and end-users.

We believe that our line of entry and mid-range products, the T200, T300 and T600, which will roll out this year, will be highly competitive in their class.

Q: How can Sony Ericsson increase cooperation with other business development and technology development partners?

Manzano: We are talking to local third-party content providers for applications to further enhance our handsets. But we have not finalized talks so there are no details yet.

Value-added services (VAS) are becoming more important for operators and Sony Ericsson believes it can support operators to develop VAS with our phones. We want to enable applications and content for both professional and entertainment purposes for Sony Ericsson

We also have Ericsson Mobility World that is helping develop tools to support third-party VAS. We work with partners to ensure availability of the tools but we don’t develop these tools ourselves. We have 28 Mobility World centers around the globe, including 11 in the Asia-Pacific.

We are developing standardized development kits to be used by these companies. We are looking for partners that can develop unique and innovative applications for our phones.

Q: What are your expansion plans in the Philippines?

Manzano: We consider the Philippines among the most important markets in Asia for potential growth. Right now penetration is less than 20 percent. We also see the local users replacing their handsets with those that offer the latest features.

We have partnered with both operators and distributors with a total retail network of more than 300 outlets nationwide. We aim to increase the number aggressively for greater visibility, viability and accessibility nationwide.