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Sony Ericsson Launches 3G Phone
Mon February 17, 2003 11:44 AM ET
By Jan Strupczewski

CANNES, France (Reuters) - Swedish-Japanese mobile phone maker Sony Ericsson launched its first 3G mobile phone on Monday and said it aims to return to profit this year by boosting market share as handset prices could fall more than 10 percent.

Executive Vice President Jan Wareby told Reuters in an interview that the company, which had a market share of about six percent in the fourth quarter, was still seeking to become the number one player in handsets in 2006, overtaking four bigger firms including leader Nokia.

"We have plans to return to the black this year through increasing market share. Being number one in 2006? We still have a clear objective to be there," Wareby said.

Sony Ericsson, the only loss-making top five handset maker in 2002, has said that it would become profitable with a market share of seven to 10 percent and analysts expect the firm may reach between six and eight percent this year.

Nokia, the world's biggest mobile phone maker, had a 39 percent market share in the fourth quarter and the second biggest Motorola had 19 percent.

The industry expects the mobile phone market will grow around 10 percent this year to between 435 and 445 million units after single digit growth in 2002.

Wareby said average selling prices of the existing range of phones would fall more than 10 percent this year. Nokia said prices would bottom out in the first quarter and then start rising again -- a claim many analysts say is optimistic.

Analysts have said that to raise market share Sony Ericsson needed to increase its offer of lower-end phones to drive volume and improve productivity.

GAIN SHARE

Wareby said the company's T100 and T200 lower-end handsets were selling very well and so was its flagship P800 camera phone which was at the top of the price range. Thanks to the new models it stopped a steady string of market share losses and gained half a percentage point share in the fourth quarter.

He said the company wanted to have a full portfolio of phones, without bias toward either end, adding it plans to launch more clam-shell models. European-based manufacturers including Nokia have largely stuck to so-called 'candy bar' models which analysts say hampers their appeal in Asia where most of the demand growth will come from.

Wareby said the 3G phone, which offered live video conferencing thanks to an inbuilt video camera, would be shipped to operators for testing in the second quarter and would become commercially available in the second half of the year.

With a clam-shell design, the phone has one video camera for the person-to-person calls and another one which is similar to a camcorder and can record short video clips. Named the Z1010, it has a color screen and battery life comparable to today's GSM phones.

It is the second mobile phone on the market which can work in both the current GSM second generation networks and the ultra fast 3G systems.

Nokia unveiled the first such 3G phone, the 6650 model, in late September, but said at the time it would only be on sale in six months' time. The phone has an in-built camera.

Wareby also said Sony Ericsson would launch a card that can be inserted into a personal computer allowing high speed mobile connections in the 3G Edge network technology in the third quarter in the United States.

A similar card would later be launched in Europe while Edge phones would come in 2004, Wareby said. Edge is a mobile phone technology allowing much greater transmission speeds than in current networks and does not need new radio spectrum, unlike the other 3G technology WCDMA.


http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=2240418