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Sony Ericsson triple software bet a luxury too far |
10123
Joined: May 29, 2008
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* Sticking with 3 operating systems despite heavy losses
* Many rivals focus on 1 to save on costs
* SE too small a smartphone maker to afford 3
By Tarmo Virki, European technology correspondent
HELSINKI, April 27 (Reuters) - Mobile handset maker Sony Ericsson's rush into the top end of the market using three different operating systems could prove a costly mistake for the struggling vendor.
The handset industry is expecting its worst decline on record in 2009 as a global recession hits demand, and the joint venture between Japan's Sony and Sweden's Ericsson has already made a 370 million euro ($486 million) first-quarter loss.
The fall in demand has taken its toll on the company's forte of mid-priced feature phones, which focus on specific selling points such as high-spec cameras or music, prompting it to look to the top end of the market, smartphones, a rare growth area.
While many makers, including Sony Ericsson, the world's fourth-largest, have said they can't compete with market leader Nokia in making cheap phones, they all fancy their chances in the smartphone segment, where three of the top makers, RIM , Apple and HTC, are specialists.
To go toe to toe with RIM's Blackberry or Apple's iPhone would be a tough task under any circumstances, but analysts say Sony Ericsson is tying one hand behind its back by planning to support three different operating systems in its portfolio.
When rival maker Motorola's star faded with the fortunes of its erstwhile hit model, the Razr, it decided last year to go with one operating system, Google's Android, to develop a competitive offering of smartphones.
Last year, by contrast, Sony Ericsson expanded its software usage beyond Symbian to Microsoft's Windows Mobile with its X1 model, which combines a touch screen and full keyboard.
"So far the X1 has not done a great deal for them, and unless they are serious about going after the enterprise market, Windows Mobile does not make sense," said Gartner's Carolina Milanesi.
It introduced the "Idou" smartphone model, which has a 12 megapixel camera and runs on Symbian software, in February. The phone is scheduled to hit the market in time for Christmas sales later in 2009.
Last December it said it would also start to use Android.
"Symbian and Android both address the consumer market, and with the portfolio Sony Ericsson has today, two platforms addressing the same market does not make sense," Milanesi said.
"Android will be very crowded, and given the investment they made so far in Symbian, maybe they should see what the Idou can deliver and bet on that," she said.
"UTTER MADNESS"
Sony Ericsson has already made tough decisions in product management, where it has cut the number of phone models in development, which makes it all the more surprising that it has not followed the same logic with operating systems.
"The plan to split development efforts between several smartphone operating system projects seems like utter madness," said GC Research analyst Tero Kuittinen.
While Android and Symbian are both run on an open-source basis, making the code free for handset makers, vendors and analysts say it is still a costly exercise to make phone software work seamlessly on top of the operating system.
The costs multiply when several operating systems are used.
"Supporting multiple operating systems in multiple regions with multiple operators is a resource-intensive strategy," said Neil Mawston from Strategy Analytics.
"Reducing the number of software platforms could actually benefit Sony Ericsson by enabling it to generate scale and uniformity. After all, supporting just one major operating system has not done Nokia, RIM and Apple too much harm so far," he said.
A charitable view might be that multiple platforms allow a vendor to hedge its bets, but if top vendor and Symbian user Nokia, which sold 61 million smartphones last year, doesn't see the need, then for Sony Ericsson, which sold just 2.3 million, it could be a luxury too far. (Editing by Will Waterman) | |
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djin
Joined: Jun 13, 2007
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Imo, if they provide more options, they have more oppurtunities. I just hope they make each os, really nice, also their phones.
Xperia T + N 96 R.I.P Desire  |
hgautam
Joined: Jan 29, 2006
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Does it mean the same for Samsung??? No...
Last year they had Windows Mobile based Omnia, now they S60 based Omnia HD and they are soon gonna have an android based phone as well... |
10123
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On 2009-04-27 19:19:46, hgautam wrote:
Does it mean the same for Samsung??? No...
Last year they had Windows Mobile based Omnia, now they S60 based Omnia HD and they are soon gonna have an android based phone as well...
Good point, but samsung are number 2in the world with a significant market share and making profit, unlike se who are 4th and constantly in the red  |
hgautam
Joined: Jan 29, 2006
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And by not doing so is gonna be even worse for them in the future... |
anonymuser
Joined: Dec 17, 2002
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I completely agree with the article, and I think this "triple bet" is the final poor decision that may well end the company. SE is already on its knees, its resources are more limited than many of its competitors and its suffered from a succession of flops in the smartphone sector already, the one sector that's actually *growing* amidst all the general doom and gloom in the industry.
They don't need three completely different products running completely incompatible OSs. To back all three horses is an unnecessary gamble, and basically establishes them as a "me too!" operation, wasting money on half-hearted attempts at each OS while waiting for somebody else to make a success of one of them. Because they're spreading themselves so thinly with development teams working in three different camps, they're going to continually lag behind everyone else - we're already seeing that with the Idou being so far behind very similar S60 phones like the OmniaHD.
Lets look at the elephant in the room, the iPhone. It's succeeded in part because it's very focussed on what it is. There's no choice of OS with the iPhone, it's a very simple proposition for the consumer, the brand and the OS (and the available apps) all go hand in hand.
One thing Sony Ericsson have going for them is their brand - with UIQ dead and forgotten in this post-iPhone era they had the opportunity to pick one OS, be it Symbian or Android, customise it heavily, and establish that with the consumer - so Sony Ericsson becomes synomymous with Android, say. With a strong brand and a strong OS combined, SE could actually build some crucial market share. But instead, they're flailing around, failing to produce any competitive products in a timely manner, and completely confusing their brand with every OS and platform going, so nobody really knows what SE stand for anymore (or, even if you're keen to go with an SE phone, which SE platform to go with).
SE are not Samsung. Samsung, LG and the like knock out a new phone every five minutes - they have the capacity and speed to jump from ship to ship at a rate of knots and just see what sticks. SE don't have that same aligity, and think that's already obvious.
[ This Message was edited by: Boinng on 2009-05-05 11:57 ] |
carkitter
Joined: Apr 29, 2005
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From: Auckland, NZ
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I completely disagree with the article but I agree with most of what Boinng says.
The Smartphone market is not growing. RIM and iPhone are growing, the others are stagnant. Boinng hits the nail on the head when he says the iPhone is focused - consumers wanting to browse and read email seldom choose anything else. Likewise, corporates are only interested in the Blackberry and not by accident or through some sort of temporary fad. RIM have built an Enterprise Software business that is second to none in the Mobile Industry and no other platform can match them at their core values.
Really the other smartphone platforms are nowhere and yes, that includes S60. People mostly buy them for the high-end multimedia features not so that they can utilise apps. These do-everything devices ultimately fail at keeping the interest of consumers long term because of their lack of focus.
Open source for altruistic reasons is not enough to sell phones. A successful device needs to rise above its platform and add value to a consumer niche. I think SE have the nous to create some good devices and the Idou certainly shows promise. The X1 has failed to create an identity for itself in the marketplace and its partly to do with the lack of identity of WM among the wider public.
I don't agree that SE is spreading itself too far over 3 platforms, that is simplistic. I think WM and Android are very similar in practice and SE need not be in both platforms, one would be enough and the best one to go for long term would be Android. However I don't see Android making a big impact outside of the US and as such SE need a Symbian Foundation device for Europe, the Middle East and Asia with the whole Entertainment Unlimited experience on it.
For the iPhone and BB it's all about the platform but with open source platforms like Andriod and SF having too much focus on the platform means SE's devices will get lost among the myriad of competing devices. They need to minimise the platform aspects and create unique identities for their phones but make it clear which apps from which stores can be used to add value for customers. If the SF and Android App Stores can't get much penetration into the app market then any SF and Android branding for the phones will be worthless.
No smartphone going forward should be unable to access new functionality through firmware updates. This is a central part of the iPhone's success and smartphones than don't copy this will fail IMO. In fact, if SE incorporated this ability into their feature phones, this in itself could rebuild their brand and profitabilty in the long term.
[ This Message was edited by: carkitter on 2009-05-05 14:46 ] | |
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Posted: 2009-04-27 18:15
