TITAN OR TITANIC?

Will the Sony Ericsson brand stage a comeback in the Indian market and regain lost glory of yesteryears? Or will it go down in the books as yet another Titanic?

There have been many brands in the country that have gained great acclaim in a very short span of time and fizzle out soon after. One such name is the hybrid Jap-Swedish combo – Sony Ericsson. There was a time, when backed comfortably by its Walkman and Cybershot series, it had remained a calm and consistent number three (in terms of shipments) in the Indian market, for years at a stretch. It was practically ruling the roost in the mid-segment handset market. Then matters changed for the worse. With the onset of economic slowdown, Sony Ericsson’s business across the world, and even in a high-growth market like India, hit a wall.

The company could not do much. Worse, over the past year, there have been speculations about Ericsson mulling over cutting-off its ties with Sony, due to the dismal performance of the JV. Matters however turned out better than expected and thankfully, the two are together after all. And there’s better news for the duo, with the company getting back in action at the World Mobile Congress 2010 in Barcelona. Sony Ericsson showcased some handsets that it plans to launch over the coming year. So where exactly does India stand in its plans. In short: way up there? The company has already launched its much-hyped Android devices Xperia X10 and Vivaz in the country. It has also roped-in Kareena Kapoor as the new face of the company. While speaking to 4Ps B&M, Rajiv Seth, Regional Head – Sales, Asia Pacific Region also said that Sony Ericsson has plans to get “very aggressive with regards to its entire marketing strategy”. Good news for believers of marketing, but isn’t it a minute too late and a dollar too short? Or will the Indian consumers lap up the company’s offerings, giving it a great chance to regain its lost glory?

On a critical note, though the company has been talking about getting serious with its India-specific plans for quite some time now, but its actions do not make the believers smile. Even during the past three months, the company has not been able to find any replacement for Anil Sethi, who resigned as the India Head for the company. Today, there is no one dedicated to India-specific operations, which is quite surprising given the kind of importance that the likes of Nokia, Samsung and even smaller local players have been giving to the Indian market. If the company doesn’t have a localised workforce for a country like India where understanding the consumers’ mindsets is a challenging job, then how can Sony Ericsson possibly hope to strike back by managing through their Singapore office?

Sony Ericsson is clearly confused. Allow us this statement, for it is one handset brand that on one hand does not have an operating system of its own (which is not a problem area), while on the other, has never been sure of which operating system it should (and shouldn’t) rely on. Initially, it started by using the Symbian platform (which is housed in Nokia handsets). In the year 2009, it launched its flagship mobile handsets – the Xperia X1 and X2, that were based on Windows Mobile platform. And today, after just a few months of betting on the Windows technology, it has planned to experiment with the Android with its Xperia X10. Thus, Sony Ericsson, as of date, is actively involved with three ‘unrelated’ smartphone platforms! And here’s the motherlode of all confusions – Bert Norberg, Global CEO of Sony Ericsson has even hinted that his company would be glad to take on a fourth platform (or more) in due course of time. This will leave the brand with a confused product line and a hazed-out positioning strategy, something which will definitely not help the cause of a company, which is struggling to reconnect with its customers not only in India, but across the world.

Ask any of the emerging local players about which Ps of marketing are most critical when it comes to a competitive and price-sensitive market like India? The answer would be – Price & Place. And those are areas where Sony Ericsson has to improve. Even its most recent launches have been in the price range of Rs.25,000 to Rs.35,000. Though this helps its premium positioning strategy, it surely will not get its sales register ticking in the Indian market. Even Hirokazu Ishizuka, Sony Ericsson Corporate VP & Head of APAC region says, “The key would be a portfolio with a minimum price of Rs.3,000, because that is where we think our phones can add value in a customer’s life.” “The reason why Xperia X1 could not do well was because of its pricing. It was launched at Rs.42,000,” avers a leading telecom analyst. Therefore the trick is to launch lower-priced products, for the mass market. There are also concerns regarding its distribution, as Rajiv Seth, Regional Head of Sales, APAC Region, says, “We already have 40 exclusive stores in the country and would be looking at opening more.” Certainly, there is no harm for the company to be selling products that fall in the premium category, but for that, it would have to work towards building an improved product portfolio, pay greater attention to its distributor/dealership network, focus on a uniform OS platform and revamp its communication strategy. Our take: though the odds are high, if Sony Ericsson works on these, it might just strike back!