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Sony Ericsson On Target to Sell 100 Million phones in 2007 |
shaliron
Joined: Jan 15, 2006
Posts: > 500
From: Melbourne, Australia
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@QVGA
Well, the reason is because the lower the average selling price, generally, the profit margin will also fall. Entry level phones make next to no profit at all, and that's why Motorola has been losing money despite its relatively large market share.
i.e.
Company X sells 100 cheap low end phones for $50 with a profit of $5.
TOTAL INCOME = $5000 PROFIT = $500
Company Y sells 50 mid range phones for $100 with a profit of $12.
TOTAL INCOME = $5000 PROFIT = $600
A wooden spoon is a spoon made from wood. Source: WikipediaWinner of: Best Thread (Huge SE Portfolio) 2007, Best Post (Huge SE Portfolio) 2007, Best Signature 2007, and 2nd Best Nickname 2007. | |
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QVGA
Joined: May 23, 2006
Posts: > 500
From: Pakistan
PM, WWW
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What about the 1100 selling 200 million copies? The fact that it was bloody simple and cheap had more to do with the sales than the fact it was Nokia IMHO.
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ttsng
Joined: Nov 09, 2006
Posts: 61
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From Reuters,
"Sony Ericsson posted pretax profit of 327 million euros ($450 million), up from 211 million euros a year ago. Analysts on average had expected earnings of 385 million euros, according to a recent poll of 20 analysts conducted for Reuters. Sales rose to 3.1 billion euros from 2.27 billion euros a year ago, in line with average analyst expectations. The company sold 24.9 million phones in the quarter, topping 15.7 million a year ago and the average analyst expectation for 23.6 million. However, average selling prices (ASPs) for its phones fell to 125 euros from 145 euros in the year-ago quarter as the company recently started to sell more low-end phones. Analysts expected the average price of 132 euros, according to the same poll, but Sony Ericsson said the decline was in line with its own expectations." |
shaliron
Joined: Jan 15, 2006
Posts: > 500
From: Melbourne, Australia
PM |
@QVGA
Yeah, it sold well because it was cheap and very usable. I'm sure the Nokia brand name did help though, not the only reason for its success, but it does help in raking up sales.
I mean, you have to admit, when you first buy into a product and you don't know anything about the product, the only thing you look for is the strong brand name. Like if I buy a cheap microwave, I'd buy one from LG over Technika if they were the same price.
P.S. Technika doesn't exist. Just an example
But the fact that Nokia has been in the mobile business for a long time means it can use its brand power to its advantage.
I mean, I'd buy a cheap Nokia over a cheap LG anyday.
The reason why SE doesn't want to sell ultra cheap mobiles is:
A) It can't afford to dampen its brand perception as it is still a relatively new company. Look at what Motorola have managed to do to a legendary brand within less than two years.
It'd be just as easy for SE to do the same thing if they don't market themselves correctly. They've put themselves in the position of a manufacturer who produces fairly high quality products. So they can't just go around selling bargain basement phones.
Much like how Apple can't go and begin selling entry level phones - because it would just 'typecast' them as a manufacturer who specializes in cheap phones, and how Sagem can't be seen as a serious mobile manufacturer.
B) It isn't worth it in the long run for the limited profitability. |
Bhavv
Joined: Jun 07, 2007
Posts: > 500
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I'll be adding +1 sale for  when I buy the K850i. Im going to try and buy it direct from the online SE store this time around, it might cost more, but I Sony Ericsson enough 
Just think though, the T650i, K850i and W960i are gonna sel loads over the rest of the year.
Aslo, isnt the T250i already cheap and nice enough to consider over other budget phones?
[ This Message was edited by: Bhavv on 2007-07-14 09:09 ] |
Dogmann
Joined: Jan 29, 2006
Posts: > 500
From: London England
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@shaliron
Are you sure about your claims i thought SE was purposely targeting the low end of the market with special phones for the Asian markets and aren't they now in a JV with Sagem to produce some lines for them or did that not happen in the end as i do remember it being reported here.
Marc
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[ This Message was edited by: Dogmann on 2007-07-15 10:00 ] |
shaliron
Joined: Jan 15, 2006
Posts: > 500
From: Melbourne, Australia
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@dogmann
When I said ultra cheap mobiles, that's exactly what I meant.
Nokia in some of these entry level countries sell their phones for as low as $20 to $30. SE has no phones at that price level, and the phones they plan to sell as 'entry level' will still remain at around $60.
This is meant to maintain the 'Sony Ericsson quality and features' as they say.
You can read the news article I posted at se-nse:
http://forums.se-nse.net/index.php?showtopic=12413
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Posted: 2007-07-14 04:51
