Sony Ericsson
warned the world just over a fortnight ago that things wouldn't be too rosy when it came time to announce Q2 results, and rosy things are not. Even though the handset maker was hoping and praying to break even at the end of the quarter, net profits ended up falling through the floor to the tune of 97%. As predicted, weak sales of mid-to-high-end mobiles were blamed for the bulk of the bad news, and it did affirm that conditions would remain rough for the rest of the year. Granted, the looming launch of the
Xperia X1 should help matters a bit, but without a new stable of low-end cellies to send to emerging markets, it'll be a long road back to the top. Unfortunately, SE's sagging position in the market has left it slashing 2,000 jobs across the globe, though it didn't say exactly where the cuts would be made. It's okay SE, there's only one place to go when you're laying on the bottom... or something like that.
[Image courtesy of
Flickr]
Read - Sony Ericsson's Q2 earnings
Read - Sony Ericsson plans job cuts
posted Jul 18th 2008 1:32PM
Horrible numbers. What is there strategy to rebound from a dismal quarter. www.readtheanswer.com/index.php?RTA=web2
Iphone has have a effect, but do you really think that iphone had any effect of this report? I mean iphone sold what 1 million mostly in USA where SE and Nokia don't exist. Iphone even as it's superb product and currently is selling great have absolutely no effect to what SE is going through now. Take those USA glasses away.
SE's problems are the same as Moto's. SE thought it was enough after those groundbreaking products and money coming out of the windows 3 years ago to stop it there and trust that the cypershot and Walkman brand will be enough and what they have achieved now will carry them around, but as we saw with Moto it just dosen't work and so did Nokia steal the spotlight as having best camera around and Nokia, Samsung smoking SE out of the emerging markets.
Sales numbers were bad on their mid to high end phones because no one was carrying them. I was all set to pickup a K850 from AT&T in March/April only to see it cut at the very last minute and replaced with that ungodly Z750a. I would happily buy a C902 if a major carrier would come out with a U.S. version. Sorry SE, but I'm not going to pay 500 bucks on ebay for a crippled 3G phone.
I don't know who is responsible for a lack or SE phones supported by U.S. carriers, but thats why I have an iPhone in my pocket instead of an SE. Call it the iPhone effect if you want, me I call it tired of waiting for a quadband SE phone thats worth a damn.
survival of the fittest.
SE misjudged consumers... in an effort to try and maximize profits they were releasing a bunch of mediocre phones instead of releasing phones that are good all around. For instance They dubb the cybershot phones for taking pictures and the walkman phones for music... Well the memory is crippled first of all for walkman phones because they started pushing yet another standard the memory stick micro with little memory. Do they not know that people want to put more than 2gb of music on their "walkmans"? The "camera phones" top out at 3MP and again memory shortage... They never released a phone that excelled at both music, functionality and pictures. But this is only the tip of the iceberg..
The "iPhone Effect."
Instead of cutting jobs at the bottom, they should start at the top. After all, the guys at the bottom did nothing but follow the recommendations of the ones at the top.
Really - the iPhone cut into the wXXX / zXXX series business? C'mon fanboi - it was more a lack of a product line suited to business needs like the Nokia E series lineup or HTC/Samsung/Asus smartphones that cost them the market. The pXX lineup had potential but lacked execution - KXXX lineup has an identity crisis. X1 maybe a tad late to enter the market - but it may be a start for SE to enter the business smartphone segment.
"Instead of cutting jobs at the bottom, they should start at the top. After all, the guys at the bottom did nothing but follow the recommendations of the ones at the top."
No joke. It seems the guys at the top can't figure out the basic law of business failure: me (corporate exec.) = fail. At least Hector Ruiz made it appear that he understood this, although, I am sure he was pushed out. Dell, for example, cuts 8000 manufacturing/sales jobs (there were other reasons for this as well) when Dell's marketshare was slipping to HP to cut costs. Yeah, I'm sure the poor bastards putting PC's together had everything to do with the company's poor performance, not the a-hole who makes more by himself than everybody he canned. Rinse and repeat for GM, Ford, Chrysler, etc.
/rant
@Krush:
I'm not fan of the iPhone at all. To the contrary, I'm sick of hearing/reading so much about it. But, if you're to tell me that the money people decided to spend on the iPhone instead of other manufacturers' phones has had no effect at all, then I'm at a loss for words. That's as foolish to assume as the statements made by Sony saying that the Wii is no competition for them. The money people are spending on the Wii is money they're not spending on the PS3. Same thing with Sony-Ericson; the money they're spending on the iPhone is money they're ... The irony of it all. The Wii is eating Sony's lunch, and the iPhone is ... you got it.
It's not about being a fanboy, as you're quickly categorized with. It's all about being an informed consumer and seeing things for what they are, and not what CE companies, and their marketing departments, want you to think they are. Love it or hate it, the iPhone has had an effect in the cellphone business just like the Wii has done the same in the video games arena.
"not the a-hole who makes more by himself than everybody he canned."
Wonderfully democratic of you, but the a-holes at the top rarely make more than everyone they fire. Check my math, but 2,000 people working 40 hours at just minimum wage for a year is $24,336,000. That's discounting any overtime, senior workers, etc. I doubt all 2,000 were just minimum wage ($5.85 USD).
Yeah it's the leadership that often fails a company first, but if you've got peons eating up that much cash with no one buying...well, it's not just the leaders that need to go. Unions may point to ridiculous exec salaries for sympathy, but those GM workers aren't pulling in pennies a year. They're part of the fiscal problem too.
That doesn't make workers bad people, or even responsible. But slicing off the top layer and thinking that'll solve everything is the kind of stellar thinking that made the USSR such an economic success.
The iPhone owns Sony Ericcson. Might as well kiss the Experia goodbye since it'll be useless against the iPhone in generating revenue. One more company to experience the iPhone steamroller effect.
It's like when Hancock goes to prison and the seasoned inmates want to ream him because he's fresh meat. Instead Hancock turns the tables and puts guys heads up each other's asses. That's what the iPhone 3G is doing to the smartphone market.
Iphone has have a effect, but do you really think that iphone had any effect of this report? I mean iphone sold what 1 million mostly in USA where SE and Nokia don't exist. Iphone even as it's superb product and currently is selling great have absolutely no effect to what SE is going through now. Take those USA glasses away.
SE's problems are the same as Moto's. SE thought it was enough after those groundbreaking products and money coming out of the windows 3 years ago to stop it there and trust that the cypershot and Walkman brand will be enough and what they have achieved now will carry them around, but as we saw with Moto it just dosen't work and so did Nokia steal the spotlight as having best camera around and Nokia, Samsung smoking SE out of the emerging markets.
"Yeah it's the leadership that often fails a company first, but if you've got peons eating up that much cash with no one buying...well, it's not just the leaders that need to go. Unions may point to ridiculous exec salaries for sympathy, but those GM workers aren't pulling in pennies a year. They're part of the fiscal problem too. "
True, and I do recognize that there is other fiscal resposibility companies, and, therefore execs. must manage; however, in GM's case, the execs. signed on for the ridiculous compensation packages that union workers receive (like full salary for several years to go back to school (however that is defined since some of the reports I have seen/read suggest that they may not even attend school), after which they do not have to return to GM). Also, GM's (and Ford's) execs. decided to continue producing large trucks and SUVs as other manufacturers moved to smaller, more fuel-effecient vehicles, leaving GM's (and Ford's) sales reeling. Just sayin'...
"Also, GM's (and Ford's) execs. decided to continue producing large trucks and SUVs as other manufacturers moved to smaller, more fuel-effecient vehicles, leaving GM's (and Ford's) sales reeling. Just sayin'..."
Yeah, but it's also easy to see the writing on the wall in retrospect. But SUVs and large trucks were the mainstay of those corporations. I'm sure careful market research suggested that heavy investment was the key to profitability for a long stretch.
Ford made their hybrids and GM has the Volt, but the American culture in which they exist cherishes livin' it large. Management was stupid and definitely overpaid (aren't they always?), but rare is the leader chosen that makes a deliberate choice to screw up. But you might be better versed in the actual character of company leaders. I just temper my condemnation with the realization that I've never had billions riding on my choices.
The iPhone effect? For a company that draws most of its sales from outside the United States? The iPhone wasn't sold in Asia until last week, and its success in UK/Germany/France was limited. Clearly some there's other problem here.
N95 is to blame! they did not have a competing phone at all, although no on else did either.
You could say that it was Nokia altogether. SE had nothing to compete with Nokia in pretty much any market. The only thing they had was some decent mid-range feature phones, which Nokia had a better model for each SE model. Nokia is sitting pretty right now, but they need to start moving faster since they have some very capable competition now.
I Don't think the X1 is going to help at all. I have a feeling they are going to miss the boat on this one.
Lol, well looky here. Im first. Im hardcore.
FAIL!!
Has anyone else noticed that a lot of news that engadget posts about sony is usually done, or tried to be done done with a negative approach? Even if the story is neutral or good news?
OMG. blogspiracy!
How is 95% fall in profits not negative??
Well, Engadget was pretty stoked about the new Sony laptops the other day (yes, Ericsson is a completely different story).
But I guess that happens only once in a blue moon. Besides, Engadget clearly doesn't need to worry about credible or professional journalism since it's "just a blog".
/rhetoric
helloUser, this is Earth speaking, have we met?
or maybe its because almost all of the news about sony is negative to begin with.
love to hate sony
nah, i don't think it's done done any differently
e-gadg were championing the shit out of blu ray also, iirc
New headline:
"Potent and visionary Sony Ericsson achieves success at limiting inverse profits to less than 100 percent; also fights global warming through reduced manufacturing and lowers carbon footprint of those who would otherwise be driving to work."
Shame, I love my SE phone with the 3.2mp camera... hope the continue to make more phones
It's a shame, I've never seen a bad SE phone, but they have a product range of ten million handsets which are all variants on the same three themes (a cyber shot, a walkman and a smartphone). They should streamline things a bit.
LOL. this is great news. i've owned the p910 and p990 (not sure why i bought the p990 after the frustrations with the p910) a while back. and all i can say is after the p990 and basically paying (i forget exactly) around $800 for the "privilege" of doing product QC for Sony Ericsson, this news makes me laugh my ass off. sorry for the language. but swore off all sony ericsson products after several years of spending countless hours scouring message boards for bug fixes/work arounds, updating firmware, re-flashing phones, restarting the phone OS, dealing with unsympathetic and unknowledgeable phone support, etc... just makes me appreciate my htc s710 THAT MUCH more. die and go to hell sony ericsson. ha ha.
Looks like people don't really care THAT much about Camera phones?
Quite the opposite. Nokia brought out the N95 and SE had *nothing* to compete with it.
They're only just catching up now and they still haven't matched the N82.
"Granted, the looming launch of the Xperia X1 should help matters a bit"
The X1 isn't going to help for two reasons:
1) It's a niche device.
2) Every preview has said it's horrible - either complaining about the speed, the stability, the keyboard or the camera. Sure, these things *might* be fixed but it's supposed to be released in Q3 (i.e. NOW) and SE's track record on recent smartphones isn't good.
SE!
Grow up or die! I'd prefer the first but you seem to move towards the second...
This is not good
When I first saw the X1, wow, I was ready to pull the trigger. Looked to be the best thing out there. But September? Just late too late....I bought the 16gb 3G on the 12th and I'm satisfied. If Sony had a *good* device out in May, I would have bought it...
see my post above... anything wrong with the X1 will most likely go unfixed and leave you with a doing free QC for SE... trust me.
damn comment system. meant as a reply to Rich
I'M SHOCKED TO SEE THAT MOST PEOPLE MENTION THE X1 FOR GOOD OR FOR BAD BUT NO ONE MENTIONS THAT PRICE TAG. LET'S BE REAL HOW MANY PEOPLE HERE WOULD PAY MORE FOR THEIR PHONE THEN THEY WOULD FOR THEIR BASIC LAPTOP? I WOULDN'T PAY OVER 700 USD FOR ANY PHONE WHEN I CAN GET ONE THAT DOES THE SAME THING FOR 200 DOLLARS LESS!!! AND NO IM NOT TALKING ABOUT THE IPHONE!
It's a very normal price for a smartphone not subsidized by a carrier, as in the norm outside the USA. Its not much more than an unsubsidized iPhone.
I'd like to know which wireless manufacturers are actually doing well. If Moto and SE are on their deathbeds then what is everyone buying? In the US I do not see much of a Nokia presence. Samsung and LG seem to be catching on but still not dominant. It seems like regardless of units sold these companies find some other way to lose money (and cut jobs).
you can look at the bright side there's still that 3%...ouch
The X1 is going to have such low volume it will have no impact on the bottom line. The bread and butter for these handset makers is not their high end gear.
It'll be up 97% when they pull out all the stops with the PSP cell phone ditty
And this is of course meant to Rob.
SE sold 24 million phones & Nokia sold 120 million in Q2 alone. iPhone has sold what.. 10 million in total? Claiming iPhone had something to do with SE's bad quarter is pretty ridicilous. It may have a impact in the future, but not yet. Nokia however, is another story..
hmmm....first Motorola, now SE.....maybe this is telling the cell phone companies something...MAKE A GOOD PHONE! Anyone else here tired of terrible, feature-less cell phones? We can only hope Android will clean this up...
Nokia is doing great currently and it's shares wen't actually 8 up after yesterdays 2Q report.
Moto and SE are something that have really been living their past achievements.... and done absolutely nothing after that. Just wrapping old products to new shells.
Nokia is really getting easily currently. For 2Q they didn't have any new devices out yet and Nokia managed to raise it's market share to 40.5%. When new S40 phones start to ship soon and Nokia's Septembers event announces new S60 handsets it has tight hold of the market. I don't have my hopes too high with Samsung to really be able to give a fight, but maybe LG can as it's really the raising start in the top 5. While iphone of course give it's TS flavor for higher mid phones.
Btw anybody know about this Nokia's Tube(5800) shown in Batman The Dark Knight!?! I haven't seen the movie yet, but it's all over the net currently!
Weird when phones like the S500i and W580i have keypad flaws in almost 90% of the phones and a recall or fix is never made. Why wouldn't sales soar??? (note the sarcasm)
Ericsson was so much better when it was just Ericsson. Used to make awesome phones like the t28 or the R380, innovative phones for its time. Sony ericsson has come up with nothing great apart from the Xperia, but that's taking frign ages to come out anyway so...
I'd love to buy a cybershot phone but I can't because of limited carriers. If you could buy a phone and use it for any carrier the phone market would be a lot better for SE.
Problem is that right now you only get to pick from garbage phones or pay through the nose for a decent phone. Even with that you get locked into a two year contract with whatever ass raper you decide to go with.
Considering that SE dropped 5th while LG did take it's place as 4th biggest mobile phone manucaturer can't just be about "style over substance".
SE has real problems with it's Walkman series by not giving 3.5 jack, build quality is crappy and not keeping up with the competition and just thinking that the killer devices that did make Nokia cry back at the time would be enough today. They are just packing old devices to new shells.
You should read some articles from Eldar Murtazin (owner of Mobile-Review who has every Nokia, SE and Samsung device year before anybody else) ) who was real SE lover thinks they are doomed.
http://www.mobile-review.com/articles/2008/birulki-6-en.shtml
Example c905 will be destroyed by Nokia's device that will be announced by September and released at the same time as c905. Not to even talk about Samsungs i8510 that have already done it.
Of course if you like uiq so much then there isn't much i can say.
Aww man. I always liked the idea they had where some Fossil watches could sync with the SE handsets via bluetooth, and when a call would come in the caller ID info would appear on your watch. I'm sure I'm like, one of the ten people that feature appealed to, but I thought it would be a neat way to check your phone during a meeting without looking like a jerk.
Not a surprise. I would have already purchased a few of their higher end phones if they had the following:
-Standard mini-USB for data xfer and charging
-2.5/3.5mm headset jack for those who choose not to use bluetooth
I don't enjoy being nickel and dimed for accessories like a proprietary USB cable that will only ever work on my Sony phone. The lack of those two things, and the mindset of the company is enough to convince me to buy other phones which have those.
I second that.....
Thing is, Sony Ericsson make the best phones for normal consumers. Fantastic UI (compared to Nokias shitty, sluggish, buggy, clunky bollocks), easy to use, fantastic features. and lots of neat touches and attention to detail.
people just wouldnt know a good phone if it hit them in the face. People buy the crappy pink ones or ones that slide, whoopee. Style over substance..
well, SE has virtually no current smartphones (p1i). This compares very unfavourably to nokia's (extensive) business and multimedia smartphone range (E series, N series), not to mention other brands.
SE had a bigggg joystick reliability problem; now they have stopped with the joysticks.
Their low-end and mid-range models have suffered from lack of new models until their very recent announcements of the S302, K330, J132 and F305.
All this adds up. I like their GUIs and generally they make good phones, but lately their new-release performance has been pretty bad.
i'll just add:
that said, their new G502, G900, G700 models are probably a good example of doing things right. It took them a while though.
Spot on man...i loved my sony erricson and i went to a nokia and the UI is shocking, things just dont make sense.
i cannot wait to go back to a SE next year.
My family has five SE phones and enjoy them all...hope they are around at upgrade time.
Unbelieve. No really, I can't believe it. I love SE phones. My friends love SE phones.
I see that the article says SALES only fell just-a-tad under 10%. But net profit just plummeted? What the hell is going on inside SE to lose all that money?
If anyone wants to see the original flickr photo page for the photo used in this article :
http://flickr.com/photos/mroach/529845670/
I'm not surprised that SE profits 97 percent. They only sell phones that support GSM. In the US, majority of phone users are CDMA (Verizon and Sprint). Verizon and Sprint users tend to use mid-range phones. Most T-Mobile and ATT users are iPhones, Blackberry, and Razr users. SE markets they devices in flooded competited markets with a high price tag aiming towards a music oriented consumer (which will probably pick up an iPhone). SE also fails to incorporate the Sony brand, they don't market it with any of the Playstation or Bravia or Vaio products.
Sony Ericsson should just split, You go your way, ill go mine.
SE makes great phones. Even the A200 platform phones like the Z750. SE was screwed by someone at ATT or ATT's commitment to Apple's phone and the money it would generate. IMHO. SE's worse technical policy was the slow move to cover UMTS/HSDA bands, and the worse business policy by their sales department who negotiated the contracts with ATT for which phones they would sell.
Why do I say this? The Z750 (and probably other SE phones) has had so many of it's features crippled by ATT's requested firmware changes; here, let me count the ways for you:
1. Video phone calling - crippled (yes, it has 2 cameras in it)
2. GPS - crippled - it's A-GPS
3. Blogging from camera as a 'send to blog' - crippled
4. RSS Desktop - crippled (has as many features as an iPhone's)
5. Podcasts (video and audio) - crippled can only be uploaded from desktop app when phone is connected
6. Exchange ActiveSync - crippled
7. iSync - crippled (YES, debranded it does, and it has SyncML, too)
8. Email push client - crippled (unranded works with ANY pop or imap server, and can filter out unwanted domains, etc from the 'push')
9. Network Sharing function obsured, phone can be part of office network via USB or Bluetooth
10. Choice between GSM & 3G vs GSM only; blocked, resulting in terrible battery life as the phone tries to be 3G all the time.
11. ATT has also blocks 3G tethering for the phone at the network, but allows EDGE tethering.
12. FOTA (Firmeware Over The Air) updates crippled.
13. Confusion on the size of the M2 Micro that the phone supports; but it's 8G, but some apps misread the file/space sizes
It makes you wonder, the SE people who designed it had the right idea, that a small compact phone with these features would be killer, then the sales department comes back from the client, and says, they like the case, everything else is to be disabled.....and design me another phone with a fancy case....
I have been a fan of walkman phones since i bought the w800i, then w810i, and now w610i. I think SE needs to concentrate on fewer phones with more features. 320x240 screen, at least 3mp cam with a/f and qvga video recording@30 fps, bluetooth, a2dp, quadband 3G, wifi, slim like my w610 with w810 keypad and a regular ms duo slot not stupid m2. All of this would make for a great mid level phone. At least my little w610 has copy&paste you iphonies!
Spot on man...i loved my sony erricson and i went to a nokia and the UI is shocking, things just dont make sense.
i cannot wait to go back to a SE next year.
Oh and they need to leave in edge support. Most of the time SE phones don't have edge and 3G. And the 3G isn't usa 3G so your stuck on gprs O_o
SE should of had on all they phones, 3g Triband (like K850) and Quadband.
Also all their UIQ are not quadband.
I always buy my phones unlocked to begin with and I love SE phones but living in the us its hard to decide witch model to get. so to sum it up,
SE please make a phone with these specifications and I will buy it:
gprs
edge
US 3g
wifi
at least 320x240 resolution screen
at least 320x240@30fps video
at least 3MP cam
with a/f
candy bar form factor
as slim as w610
keypad like the one on w810
customizable soft keys!
walkman 3.0
regular MS duo slot
bluetooth a2dp
and last but not least..... a friggin 3.5mm headphone jack!!!
make it and people will buy it!
http://www.gsmarena.com/sony_ericsson_j132-pictures-2430.php
You want 3.5mm headphone jack, u say?
Only problem is you have 4MB onboard memory :p
However, this might be a sign of (some?) new models switching to 3.5mm. The only problem I see with this is 3.5mm jacks go bad without adequate dust and dirt protection. Perhaps they didn't want this affecting them with unnecessary returns (lots of lint and so forth in a pocket without the 3.5mm audio plug being used), and it's fair to say phones are probably more used than traditional audio Walkmans.
Way to attribute this to Flickr and not the actual source of the image: the person who went out and took the photograph. Yet another abuse of Creative Commons licensing.
Having used SE and Nokia (cheap models), I am MUCH happier with the SE. I have a w810i and it works very well.
Pros:
Candybar (small compact, no flipping, etc) Iphone is too big to fit in my pocket.
Excellent software (much better than nokia!)
Shows up on my computer as a drive, so I can load music and podcasts easily
FM radio (why won't apple install this on ANY of their gizmos?)
Cons:
The propriatory connector sucks. Mine earphones regularly wear out and don't connect well.
For my purposes, the w810i is perfect.
Atomic