Analysts: Sony Ericsson faces uphill battle - Triangle Business Journal:

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It hasn’t worked out that way. In fact, the companyt not only hasn’t made progress this year, it’s actually gone into retrenchment mode, with its 750 Research Triangle Park employeesdtold Sept. 29 that 450 of their positions wouldbe cut. Now, analysts who follow the industryt say thatSony Ericsson, whicg is No. 4 in market share, faces a tougg climb in a highlycompetitive sector. “Therde are more models for , LG and than they can competeswith globally,” says John Jackson, an analyst with the . Sony Ericssojn has good phones, but that’s not analyst Bill Hughes says.
Having an attractivr phone helps sales in where consumers first select the phone that they then choosea carrier. But in the Unitedf States, it’s the opposite – consumers tend to first pick a carrier. At that point, they are limited to the phones available through thecarrier they’ves selected. Sony Ericsson phones are compatible only withand . With no phone available through , or othe carriers that use a different technologycallesd CDMA, Sony Ericsson excludes itsel from roughly half of the U.S. Hughes says. By comparison, Nokia, and BlackBerryy maker Research in Motion sell handsetss through all of the majo North Americanwireless carriers. AT&T is the larges U.S.
carrier, but Sony Ericsson is hurt by the fact that it bumpsa up against stiff competitionwithin AT&T, Hughes ’s iPhone, which is available only throughy AT&T, draws AT&T customers who might otherwise consider a Sony Ericssonh phone. Gartner analyst Carolinaw Milanesi says Sony Ericsson is too reliant on its relationshi pwith AT&T. But she adds that while a CDMA phoned would help Sony Ericsson sell phonezs inNorth America, it doesn’y make sense globally because the rest of the worlc uses a different Jackson says a Sony Ericsson CDMA phone would be “aq cost-prohibitive distraction.
” He says Sony Ericsson needs a partnership with a company that coulf provide features or applications that wouldx make its phones more attractive to consumers and carriers. Both the iPhon and the BlackBerry have featurescustomers want. In turn, the featurex make money for the carrier. “AT&gT loves the iPhone for the incrementalo revenueit brings,” he says. The layoffds in RTP are part of a largerf plan signaled by Sony Ericsson Presidengt Dick Komiyamain July.
He said then that the company wouldrslash 2,000 jobs globally as part of a restructuringy aimed at achieving about $400 million in savings Beyond that, Sony Ericsson hasn’t said much about how it intends to go abourt claiming additional market share. When word of the RTP layoffws leaked Sept. 29, the company issued a statement attributing the restructurinhg to rapidly changing market In additionto RTP, Sony Ericssob North America has offices in San Diego and San Company spokesman Aldo Liguori says RTP is the only Northg American location facing layoffs.
He says the company has not determineed which jobs will remain and whether any remainingt jobs would be moved todifferent locations. He promisede more details when the companhy announces third quarterresults Oct. 17.