Sony Ericsson plans more specialized phones

After an enthusiastic consumer reaction to Walkman-branded cell phones, Sony Ericsson Mobile Communications is planning more handsets that are focused around a single, major feature, the company's president said in an interview in Tokyo this week.

The company put its first Walkman handset on sale in August 2005. Several more models, all of which have more of an emphasis on music than a conventional handset, have followed and sold "way beyond our expectations," said Miles Flint. From launch to the end of 2005 the company sold 3 million Walkman handsets and sales in the first quarter of this year totaled 2.5 million phones.

In designing the phones the company sought to leverage the power of Sony's Walkman brand name, which despite being bruised by competition from Apple Computer's iPod is still very widely associated with portable music.

"We are trying to build our reputation on being the leader in mobile music and it seems to be working," said Flint.

The brand name gives Sony Ericsson an advantage over its competitors, he said.

"If you look at the other four handset makers I'm not sure any have been able to establish a brand with their phones that make them stand out as music devices. Motorola clearly had the first attempt to link up with Apple and it seems initially that hasn't proved hugely successful and with the other three it isn't clear how they can brand their phones to make them stand out to consumers," he said.

"If Sony hadn't let us use Walkman -- and there was never any doubt they wouldn't -- it would have been much more difficult," said Flint.

The phones are also being well received by carriers, he said. Over-the-air downloads help drive usage of networks and increase revenues so mobile music is an area in which many network operators are interested, he said. Sony Ericsson is finding the same with two other lines of phones it plans to push this year.

The K800, launched earlier this year, is the first model to borrow another famous Sony brand name: Cybershot. Flint said its digital still camera functions are a notch above other handsets and the phone includes a link with Google's Blogger service that allows users to quickly upload photos and messages to their blogs. It's another example of a handset more tightly focused than a traditional model and also something operators are welcoming because it drives up data traffic, he said.

Sony Ericsson's third area of interest this year, after Walkman and Cybershot handsets, is Blackberry-enabled models for the business and corporate market, he said.

"Most operators say our phones are among the biggest ARPU drivers," he said, referring to the industry abbreviation for average revenue per user.

As new handsets come out users are likely to see more phones that combine several functions but are tuned to one primary use, Flint said.

"I don't think we're heading to the Swiss Army knife that does everything," he said. He likened the handset market to the digital camera market, where video cameras can take still images and still cameras can do video but no single device does both very well.

As for the future of mobile music and the much-rumored iPod phone, Flint said it could be good for Sony Ericsson's business if such a device is developed.

"If there was one, it would probably accelerate the whole music on mobile [market]," he said. "With the head-start we've got, I think we can compete with anyone else whoever they may be."