Sony Ericsson vs. RIM

“Our third consecutive quarter of profitable results illustrates that Sony Ericsson’s overall performance is stabilizing. Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50% of our total sales,” Chief Executive Bert Nordberg said in a statement.

via Sony Ericsson swings to third-quarter profit – MarketWatch.

As the world welcomes Sony Ericsson to the smartphone market, we compare its unit volumes to another vendor that’s been selling only smartphones.

Sony Ericsson took the Android life jacket and it saved them, for now. But think for a moment where they used to be. A very similar story to Motorola.

  • I agree with your statement, although I see this as being a looong ways away.

    • FalKirk

      How long? Smartphones are rapidly devouring dumb phones and feature phones. And at some point the market will be saturated. Many, many people simply do not need a smartphone and will not buy one. So when do smartphones reach saturation and start to turn on one another? Based on absolutely nothing, I'll say it starts in about two years.

      • Marcos El Malo

        It might be useful to compare how quickly other tech has been adopted to get some sort of idea, looking for similarities and also the differences. I know this is an arbitrary starting point, but let's use Windows 3.1, which came out about 1992, iirc, and see how quickly the PC market became saturated and there was a race to low margins. And again (I suppose one could look this stuff up, maybe by looking at stock performance), let's arbitrarily pick 2005* as the point when the PC market became saturated (at least in the U.S.). Oh! It just occurred to me! Wasn't the Web born in 1991? There's another tech that was adopted quickly, although it's hard to say if it's yet to be saturated! (OK, I'm typing as I think. Sorry, bear with me, please.) The first (so far) big dot com crash was in 2000. So, let's say it took 10 – 13 years for the PC/Internet combo to mature and reach 50% saturation. Hardware advances helped move it forward, as did software advances. By around 2005(?) however, the hardware guys were getting squeezed. Consolidation of the players that didn't leave the market outright.

        I think 10 years is a conservative outside number, but I don't think it would be controversial to say that the smart phone market is growing at a much greater rate. Part of this is due to the hardware already being advanced enough to consume todays multimedia web. The other, more important thing is that most of the advances are coming through software, which can advance much more rapidly than hardware, and seems to be driving the market.

        I'm just pulling this number out of my butt, but let's say smart phone adoption is going to be twice as fast as PC adoption. So, we're looking at 5 – 7 years. But what is our starting point? 2007! That was the year that someone came out with a smart phone that was appealing to non-techies.**

        2012 seems kind of aggressive for predicting when smart phones will reach 50% of the market, but 2014 doesn't seem unrealistic.

        Someone could try to come up with real numbers, rather than the crap I came up with, but my basic process is sound in regard to gazing into the crystal ball.

        * in 2002 Compaq was acquired by HP. In 2005 Lenovo bought IBM's PC hardware division. E-machines was bought in 2004 by Gateway, which was in turn bought by Acer in 2007. Dell bought Alienware somewhere in there, but that wasn't that huge an acquisition.
        ** Hopefully I don't have spell out what phone I'm thinking of. < coughcoughiPhone >

  • John

    I've been wondering: what would the world look like right now if Google hadn't been working on Android when Apple released the iPhone? The iPhone exposed Windows Mobile as a dinosaur waiting for extinction

    • asymco

      Good question. The answer, I believe, is that Windows Mobile would still be the choice for the vast majority of vendors but they would be skinning it with layers of their own. This is what was happening around 2008 or so. HTC, Samsung and Sony Ericsson all had layered their own UIs on top of WinMo. It's also possible that they would be licensing LiMo or forking some Linux into their own implementations. None of these would have been very competitive vs. iPhone and quite possibly some like Motorola might actually been sold off for scrap (IP rights, mainly). Android made life a lot more comfortable for vendors, at least in the short run.

      • Some might say "peeing in their pants in winter".

      • Marcos El Malo

        You must be Finnish or something! 🙂

        (My guess is "something".)

  • Rob Scott

    The problem with RIM though is that their products are not better than Ericsson’s, just cheaper, a damn lot cheaper e.g. 8520. Fighting on price is a losers strategy. If they do not come up with something worthwhile you will be plotting them up against Ericsson with everything reversed.

    I hope Apple expand the iPhone option count next year addressing the 200 – 300 Euro price range and wipe RIM off. RIM and its clunky products needs to go, so is Nokia. I was playing with the N8, the thing is terrible.

    • Marcos El Malo

      RIM did by QNX, which might get them further differentiated in the market. It really depends on whether they can get some good UI on top of the new kernel. My uneducated guess is that RIM is still very much in play and are still masters of their own destiny. The Android handset makers are not, although at least they now have the choice between two masters (MS being the second master).

      • Marcos El Malo

        I meant buy, not by. I haven't figured out how to edit on here yet.

  • RIMs unit growth, at least in Europe, is actually in the 16-24 market. Heavy texters/BBM users for social reasons. They do well with the cheaper models in that market precisely because it's cheap.

    • asymco

      Exactly right also in the US. Teens use iPod touch for apps and games but a Blackberry for voice and texting. BB is very cheap and comes with free texting. This solves the primary jobs for that demographic.

  • John

    I think the smartphones will penetrate farther than many think. They may seem optional now but will become more and more necessary.