Thumping to Success

VoicenData Bureau
New Update

Last year, Sony Ericsson found itself in the big league with a revenue

increase of 122.4%: from Rs 1,386 crore in FY 2006-07 to Rs 3,082 crore in FY

2007-08. Sony Ericsson is second to Nokia in the mobile handset segment with a

market share of around 13%.


India has emerged as a key market for Sony Ericsson as it plans to decrease

its presence in Europe, which traditionally has been its strong market.

Globally, the average selling price (ASP) has come down for the company mainly

due to the impact of softer sales of high- to mid-end models.

Sony Ericsson plans to further augment its Walkman and Cybershot series. In

the Walkman series, it launched the W200i, W580i, W960i and W910i models. New

models like K850 and K810i were added in the Cybershot series. Last year, the

company launched fifteen models of handsets apart from introducing a new

range-Emotive-represented by S500i and T650i. The company also unveiled a new

sub-brand in the premium segment, Xperia.

Sony Ericsson



In keeping with its strong position in the music phone category, Sony

Ericsson plans to launch FM/AM radio handsets-R300 and R306. Likely to be priced

between Rs 4,000 and Rs 4,500, and hopes to offer a stronger proposition to the

low-end segment with these products. Though known mostly as a strong player in

the mid-to-high category, the company launched the J121i and T250i models to

cater to the entry-level market last year.

The last year saw Sony Ericsson double their production capacity in the

country, and this year, sensing the growth potential in the mobile handset

segment, the company set up an R&D unit in Chennai to boost growth. The yet to

be launched models R300 and R306 will join the ranks of J110, J120 and W200i,

which are already being manufactured in India. The company plans to double its

production capacity by 2008.

The company roped in Bollywood heartthrob Hrithik Roshan as their brand

ambassador. The successful 'Thump' campaign is believed to have played an

important role in increasing Sony Ericsson's brand recall.


Sony Ericsson wants to maintain the same growth rate this year too, and wants

to increase the number of exclusive outlets from 65 to 200 in another two years

time. As of now, most of the exclusive stores are in tier-1 cities, but shops

are now being planned for tier-2 cities. There are rumors that the company is

planning a reshuffle of its distribution network as well.

With the mobile market all set to grow and Sony Ericsson increasing its focus

on low-end handsets, the current year looks promising.

We aim to penetrate deeper into the

market to cash in on the telecom boom

General Manager

Sudhin Mathur

Address: Sony Ericsson Mobile Communications

Ericsson Forum, DLF Cyberciti, Sector 25A, Gurgaon - 122 002, Haryana,

Tel: +91-124-2560808

Fax: +91-124-2565456


  • Increase of revenue by

  • Launch of R300 and

    R306 for low-end segment
  • To increase the number

    of exclusive retail outlets
  • Set up R&D unit in


What factors are driving the growth of the

Indian mobile phone segment?

The newly tapped category B and C circles coupled with higher disposable

incomes have boosted mobile growth in the country. Acquisitions in B and C

circles have increased, as the total cost has become more accessible both in

terms of mobile handsets and mobile services and is within reach of a

greater number of consumers.

Additionally, a wide range of handsets are

becoming increasingly available with innovative features and value add-ons,

and contributing to the robust growth of the sector. Apart from this, the

upgrades, or the step-ups to the handsets in the market have also seen a

splurge in demand. Attractively priced smart-phones are also contributed to

this growth.

What are your major concerns? Has

profitability taken a beating due to pricing pressures?

The gross margins remained relatively stable for Q1 2008, as expected.

We have substantially invested in R&D as a percentage of our sales. We are

also focusing on widening the existing portfolio and have introduced fifteen

new handsets including our new premium sub-brand Xperia. These are in line

with our future growth plans and strategy to become one of the top three

players globally by 2011.

However, the global economic downturn and

moderating sales growth of mobile phones has started to affect the telecom

industry. Also, the sluggish market growth in mid- to high-end phones is a

cause for major concern. In addition, certain component shortages for

popular mid-priced phones have contributed to modest unit sales growth in

the first quarter.

What are your plans on the distribution


Ingram and Salora are our distribution partners. In the next two years,

we are aiming to penetrate deeper into the market to cash in on the telecom

boom in the country. We are also planning to have 200 exclusive retail

outlets. As of now, we have sixty-five exclusive retail outlets, with most

of them in the tier-1cities.

What are the major market trends in the

Indian mobile phone sector?

Consumers have put mobile entertainment on the forefront of the emerging

trends in the Indian mobile handset industry; be it listening to music

on-the-go, or clicking images and videos, sharing it all though their GPRS/EDGE-enabled

handsets, catching up with friends on Orkut through their phones and much


The increasing popularity of radio has seen

mobile users demanding FM/AM-enabled handsets. We have introduced the first

ever handsets with both FM and AM capabilities-R300 and R306.

Indian customers are evolving and their

enchantment for smartphones represents this trend. Sophisticated smartphones

with touch-screens are not just a style statement but also help to keep in

touch with business and entertainment needs on the move. However, staying in

touch with friends, peers, and fellow bloggers through the Internet is a

rage this year. Coupled with the global positioning system (GPS), this

Web-enabled handset makes a great companion.