September 17, 2024, 8:27 am | Read time: 5 minutes
When a telecommunications specialist and an entertainment giant join forces to bring out smartphones, it sounds promising. Nevertheless, Sony Ericsson no longer exists. If you hesitate too long, you lose the tough competition.
The joint venture between Sony and Ericsson was established in 2001. The Japanese company Sony was already known for its consumer devices at the time. Televisions, video recorders, cameras, and audio products – Sony has been serving all these sectors for decades, in some cases. Ericsson, on the other hand, was and is an established network equipment supplier that was founded in Sweden back in 1876. In the early years, the company manufactured telegraphs and the first telephones, among other things. In the 1990s, the company also developed the radio technology for Bluetooth and built the first cell phones. However, this division was discontinued due to a fire at a supplier – until the company joined forces with Sony in 2001 and wanted to make a fresh start.
Even then, the collaboration between the two companies seemed very fitting. Ericsson’s cell phones were not exactly user-friendly. Up to that point, Sony’s mobile phone division had been incurring losses for the company. The combination of Japanese know-how in design and consumer electronics and Ericsson’s expertise in telecommunications, therefore, seemed to be an ideal match.
Overview
Success with the T610 and the Walkman series
And indeed: Sony Ericsson made a name for itself two years after its foundation with the T610. It was one of the first cell phones with a built-in digital camera, Bluetooth (invented by Ericsson), and a color screen. It also impressed with its modern aluminum design.
Two years later, Sony Ericsson underlined the fact that the joint venture’s cell phones were to be small entertainment centers with the W800i from the Walkman series. The W800i could play music for up to 30 hours on a single charge.
Global economic crisis and underestimated trends
Until 2006, shareholders Sony and Ericsson were delighted with the rising sales figures for their cell phones. At the time, Sony Ericsson was number 4 worldwide with a market share of around ten percent, but the manufacturer was slow to react to the first smartphones and underestimated the trend towards cell phones with touchscreens.
In 2007, Sony Ericsson got into difficulties as a result of the global economic crisis. The manufacturer was surpassed by LG, dropping to the fifth position in the global market. In 2008, Sony Ericsson was compelled to release two profit warnings. By the middle of the year, profits had virtually evaporated compared to the same period in the previous year. It fell by around 98 percent.
Job losses, better cameras and touchscreens
Sales continued to plummet in the following years. In 2008, Sony reported that 103.9 million cell phones had been shipped. In 2010, it was only 53.3 million, and in 2011, only 12.5 million devices. Sony Ericsson cut 2000 jobs in response. And that was just the beginning: by the end of 2009, the restructuring program had resulted in a total loss of 5000 jobs.
In particular, Sony Ericsson increased the number of megapixels in the built-in cameras of its mobile devices. In 2008, the C905 was the first cell phone with an 8.1-megapixel camera. A year later, Sony Ericsson presented the Satio smartphone with a touchscreen and a 12-megapixel camera at the Mobile World Congress in Barcelona. In addition to the camera, the device impressed above all with its music and video playback.
Symbian, Android, and the iPhone competition
However, the competition was getting tougher: other manufacturers such as Samsung, LG, and Apple were making gains in terms of design and technology. Suddenly, the Sony brand was no longer associated with music, but Apple was. The iPod was already available in its sixth generation, and in 2007, the first iPhone was released, the success of which Sony Ericsson underestimated.
At that time, the manufacturer used the Symbian operating system. This was quite powerful, but adapting the apps to Sony Ericsson’s Symbian version caused problems. The selection of applications was comparatively small.
In 2008, HTC launched the first Android smartphone on the market. Although Sony Ericsson followed suit a year later with the Xperia X10, the Swedish-Japanese manufacturer continued to launch smartphones with the Symbian operating system until 2010, most recently the Vivaz. Only then did Sony Ericsson focus exclusively on Android – too late, as it turned out.
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Sale of shares brings the end
After Sony Ericsson made a profit of 90 million euros in 2010, a loss of 247 million euros was recorded a year later – even though the smartphone market was booming. Ericsson decided to exit the venture and sold its shares for 1.05 billion euros in 2012. A price that many market analysts felt was too low. The Sony Ericsson name was a thing of the past. The Japanese continued smartphone development under the name Sony Mobile Communications.
Sony maintained its focus on entertainment features. Several Xperia models followed, mainly in the high-end price segment with high-quality image processing. But today, Xperia smartphones no longer play a major role. Leading market analysts no longer list Sony separately as a smartphone manufacturer. The Japanese company has faded from prominence in the smartphone market. Sony Mobile was merged into Sony Corporation in 2021.