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.
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Sony Ericsson
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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
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General Manager
Sudhin Mathur
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Address: Sony Ericsson Mobile Communications
Ericsson Forum, DLF Cyberciti, Sector 25A, Gurgaon - 122 002, Haryana,
India
Tel: +91-124-2560808
Fax: +91-124-2565456
Website:
www.sonyericsson.com/cws |
Highlights
- Increase of revenue by
122.4%
- Launch of R300 and
R306 for low-end segment
- To increase the number
of exclusive retail outlets
- Set up R&D unit in
Chennai
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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
front?
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
more.
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. |
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