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Hearts and minds – Sony’s return to UK

Paul Withers
April 24, 2012

Sony Mobile wants to ‘re-engage’ with the public – starting with a £20 million marketing blitz. Paul Withers asks the firm’s president of North Western Europe, Pierre Perron, how he intends to claw back market share

A lot has been written about Sony’s recent separation with Ericsson after 10 years – some good, some bad.

Ericsson is the world’s leading builder of network infrastructure equipment, with 36 per cent global share. It made £140 million in Q4 of 2011.

With Sony Mobile Communications, the mobile business formed following Sony Corporation’s £871 million buyout of Ericsson’s share of Sony Ericsson, the story is more complicated.

Sony Ericsson, as it was for more than a decade, has been a mix of success and failure, with the latter taking precedent in recent years.

The joint venture started brightly, quickly showing the potential to become a mobile superpower it hoped to be.

As promised, it began adding popular Sony products such as its globally recognised Walkman and Cybershot brands on its popular K and W handset ranges, differentiating itself from the chasing pack by leading in mobile music and photography.

But, like Motorola with its V range, Sony Ericsson stood still for too long, handing the advantage back to its rivals.

It failed to compete on innovation and its brand loyalty loosened, market share plummeting to less than two per cent globally. Handset manufacturers not even on the scene during its heyday, such as Apple with its iPhone models and Samsung, all built share during this period.

That was most evident in Sony Ericsson’s financial results for last year. In January, the manufacturer announced it had made losses of £206 million in 2011, compared to a profit of £75 million the year before. This included a loss of £173 million in Q4 2011 after the company had broken even in the previous quarter.

Sales fell to £1.1 billion, down 16 per cent compared to 2010. Something clearly needed to be done, and on February 19 2012, Sony Mobile Communications was formed.

President of North Western Europe Pierre Perron (pictured), who replaced UK and Ireland managing director Nathan Vautier in September, is fully aware of the massive task at hand but believes the standalone Sony brand will help the firm regain an emotional attachment with all members of the public, not just those who owned a Sony Ericsson device.

Perron is a veteran at Sony, having joined the company in 1998. He headed up Sony Ericsson’s French division between October 2001 and June 2009, before Belgium and Luxembourg were added to his list of territories.

In March 2011, he became general manager for northern Latin America, Central America and the Caribbean before moving to his current role. Perron therefore has plenty of experience in global markets, and his job will be to implement that knowledge to increase Sony Mobile’s success here.

He explains: “Sony has 60 years’ worth of entertainment power behind it. I’m sure in every British household there is at least one of our devices – PlayStation, Walkman, television, DVD player, Mini-Disc or hi-fi .

“Therefore, Sony means something to people, which is probably one of the major assets we have compared with many of our competitors. We will no doubt be leveraging that.”

Mobile World Congress launch

Just two months after the ink had dried on the JV separation, Sony launched a strategy at Mobile World Congress (MWC) in Barcelona to leverage brands such as Sony Entertainment Network – which includes movies, music and television – across its portfolio, including handsets and tablets.

Sony unveiled two new handsets on the eve of the event – the Xperia P and U. However, the P, despite looking very similar to the Xperia S, was of a lower spec than the debut device and the Xperia U had a lower spec than the P.

The reception from those in attendance at MWC was downbeat, with many suggesting little had changed from the previous range of Xperia handsets that were launched under its previous Sony Ericsson brand.

The Xperia brand was the one Sony Ericsson used as part of its failed attempt to rebuild its market share, beginning with the X10 in April 2010, but Sony Ericsson struggled despite releasing 14 Xperia handsets globally before the Xperia S. These included the arc, arc S, mini, neo, Play and ray.

Perron agrees the Xperia brand wasn’t overly successful, but despite the fresh approach now taken by Sony Mobile, he denies the manufacturer is taking risks in continuing to stick with the brand.

“The Xperia brand is still a relatively new and fresh one and we want to build on that,” he says. “This is why we’ll be investing a significant amount of money to make sure consumers recognise Xperia as the Sony smartphone brand.”

Regardless, many of the 400 or so in attendance for the unveiling had hoped for more despite the sale of the JV share only going through weeks earlier.

Perhaps the biggest surprise was its lack of quad-core devices that dominated the headlines at the event. HTC, LG, Huawei and ZTE all debuted their own quad-core processor handsets in the form of the One, Optimus 4X HD, Ascend D quad and Era respectively.

Nokia also sparked interest by unveiling the 808 PureView with its 41-megapixel camera.

But Perron insists Sony isn’t interested in scrapping with its rivals over who has the fastest or best-looking phone. He says that is not what consumers are looking for. He says  they are more interested in entertainment on their devices and what they can do with that.

“You didn’t see a pure technology statement from Sony because the battlefield is different this year,” he says.

“We do need technology and enablers but the consumer’s expectation is no longer to have the slimmest or most powerful device. They are willing to be seduced by entertainment, ecosystems and the opportunity to share their content.”

Full article in Mobile News issue 512 (April 23, 2012).

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