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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Reviving The Walkman Brand

The success of the Walkman phones was also seen as a major boost for Sony's Walkman branded music players. Ever since the iPod was launched by Apple Computer Inc. (Apple) in 2001, the Walkman had been steadily losing market share and popularity in the music player market.

As of October 2004, the iPod had a 90% market share for hard-drive-based players in the US and an over 70% market share for all music players. Apple had shipped over 30 million iPods between 2001 and 2005. Earlier, Sony's music players sold under the Walkman brand did not support popular music compression formats like MP3 and AAC. The company wanted customers to use its self developed ATRAC (Adaptive Transform Acoustic Coding) music compression format. However, customers preferred the MP3 format and they turned away from Sony to the iPod. Sony later realized its mistake and brought out music players that were compatible with all music formats. But analysts felt that the move had come too late as the iPod had already become popular...

Keeping up the Tempo

Sony Ericsson capitalized on the success of its W800 Walkman phones and introduced new models. Flint said "In the fourth quarter (of 2005), we continued to announce exciting new products at a variety of price points; from high-end 3G products like the new W900 3G Walkman phone to attractive mid-tier clamshell phones like the Z520 model to lower-priced essential phone models such as the J230, J210, and Z300 that will appeal to consumers who want a simple and stylish handset." On February 28, 2006, Sony Ericsson announced the launch of the W300 Walkman phone which was aimed at the lower segment of the mobile phone market. The phone would be available from the second quarter of 2006 worldwide...


Though Sony Ericsson was the first company to introduce a full-fledged music player in a mobile phone in 2005, the concept of a mobile phone with a music player was present much before the entry of the Walkman phone. The Samsung D-500 mobile phone, which won the GSM Association's award for the "Best Mobile Handset" at Cannes in 2005, was introduced in the final quarter of 2004 and it came with a MP3/AAC music player. Strategy Analytics, a global research and consulting company, considered the Motorola E1 ROKR phone, that was compatible with iTunes, and the Samsung A970 as the real competitors for the Walkman phones...

Portable Players Vs Music Phone

The success and promise of mobile music phones prompted analysts to predict that the future of Walkman phones and other mobile music phones was good. Analysts also said that these phones were Sony Ericsson's response to Apple's iPod. In an article published in The Wall Street Journal in April 2005, Christopher Rhoads and Nick Wingfield said the iPod faced a challenge from the mobile phones with music players. They stated that the Motorola ROKR phones compatible with iTunes and the Walkman phones from Sony Ericsson were a potential threat to iPod music players...


Exhibit I: Summary of Sony Ericsson's Financial Performance
Exhibit II: Sony Ericsson's Brand Name and Logo
Exhibit III: W800 Walkman Phone
Exhibit IV: Different Walkman Phone Models
Exhibit V: Home Audio System Mds-70 with W900
Exhibit VI: Most Popular Brand: Poll Conducted at Mobile-Review.Com


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