Sony Ericsson's Mobile Music Strategy

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Case Details:

Case Code : BSTR215
Case Length : 19 Pages
Pages Period : 2001-2006
Organization : Sony Ericsson Mobile Communications AB
Pub Date : 2006
Teaching Note :Not Available
Countries : Europe, Asia
Industry : Mobile Phone

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Mobile Music Strategy

In February 2005, the company announced its 'mobile music strategy' at the 3GSM World Congress, Cannes, France. The focus of the strategy was to integrate of high quality digital music players into stylish mobile phones under Sony's world famous Walkman brand.

Husni Al-Assi, General Manager, Sony Ericsson Middle East and Africa, said, "The move by Sony Ericsson in collaboration with Sony Group will create a compelling consumer proposition capable of redefining the digital music market and driving operator revenue. Based entirely on open standards, the strategy will focus on delivering easy-to-use music phones supported by a full range of exciting music download services, including the Sony Group digital music offering." Apart from a digital music player, the phone would be equipped with a digital camera, FM radio, games, and other key features such as easy-to-use software to copy music to the device, large music storage capacity, long battery life, quality headphones, and cutting edge design...

The Impact

The Walkman phones were launched in the third quarter of 2005, and their impact was visible in the next quarter itself in terms of increased volumes, sales, and net income for the company.

Analysts attributed this success to the company's strategy of targeting a specific product portfolio like Walkman phones rather than providing all kinds of mobile phones across various price points. Chris Ambrosio, Director, Strategy Analytics, said that camera phones had helped Sony Ericsson get back to the profitable path in 2004 and Walkman phones were taking the company's success forward. He added, "That's their product niche and they do it very well."

For the fourth quarter of 2005, Sony Ericsson reported pre-tax profits of 206 million euros (US$ 249 million), which was a 36.4 per cent increase over its third quarter figures and 47.1 per cent higher than the figures for the same period in 2004...

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