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Spillikinks #12 or what’s wrong with Sony Ericsson

When I saw the announcement of three new Sony Ericsson phone in London I didn’t know what to say. Unlike the vast majority of our readers and those who still care about the company’s future, I was left speechless not by the models they unleashed there. Long before the launch event it had been clear they were nothing but a PR campaign, design to steer our eyes away from the manufacturer’s problems. What I was amazed by, however, were other “minor” things that indicated the scope of hysteria within the company, lack of perspective and faith in their own fans. Now let’s run through all these “tiny details”, shall we?

First and foremost, they are forgoing Memory Stick and M2 memory cards. Now, all their new phones come bundled with microSD support, whereas for years the company was trying to get the notion that Sony Ericsson’s style is no different from Sony’s style right into the back of our minds. They used the synergy effect and it made sense, but how their 2009 strategy is different, what happened? Why all their previous efforts were scratched, why microSD? One of the major niggles with their old memory cards was how much they cost. About 4 years ago, the picture looked grim indeed: M2 cards went for almost 1.5 times more than their counterparts with similar capacities. But it was Sony. This short and explicit explanation, however, didn’t quite appeal to the mass market – people wanted M2 memory cards to retail for at least the same price as microSD. So when the Sony Ericsson K850 saw release they managed to make a breakthrough, talking Sony into lowering the prices. When they reached this parity, though, some retailers couldn’t resist the temptation to set higher premiums for Sony-branded memory cards regardless. Then, just for the sake of an experiment, Sony Ericsson implemented a dual- memory card slot that supported both M2 and microSD. While the experiment was considered a success, there was no need to continue it – the price of M2 memory cards finally slid down to the “fair” level, and the problem disappeared.

Some time during the autumn of 2008, over at Sony Ericsson they came to realize that their products were no longer met by the crowd with the same enthusiasm as before. The brainstorm that ensued revealed a lot “problems” that hampered the company’s performance. I’ll list a couple of them below:

Use of proprietary memory card type
Phones don’t look like those the world’s top manufacturer (Nokia)
People switching to Sony Ericsson from other brands are unfamiliar with keypad layout

And two dozens of other “problems” that were just as important. Unfortunately, Sony Ericsson’s “wise men” rushed to rectify all these glitches in their phones at breakneck speed, it didn’t even occur to them what these changes could do to their brand. In fact, they are ruining the spirit of Sony Ericsson, in an attempt to create some semblance of a Nokia mockup, depriving their own products of Sony Ericsson’s unique and very distinctive style. The recent relocation of “Space” to “0” from the “#” key is justifiable – after all, there is an industrial standard that all companies have to comply with. But this is only a small drop in the bucket – Sony Ericsson ditched some controls in their A200 to make it look more like Nokia’s products, as well as implemented support for Nokia UI. However these changes can be explained from a different standpoint, since at that time Sony Ericsson tried to make their phones compatible with all third-party Java applications, so if they opted to stick to their proprietary control system, they would have made it impossible for many apps to even launch on these phones. After weighting all pros and cons and how the change would affect the habits and preferences of their fans, Sony Ericsson decided to go for application compatibility and set the plan in motion.

These days that move is being used by Sony Ericsson as an excuse to give green light to all changes, whose sole purpose is to make A200 as similar to Nokia’s S40 as possible. They have copied its home screen design, as well as other features. And even ordinary users can’t ignore these tendencies anymore. It’s up to you to judge how justified Sony Ericsson’s current motifs are, compared to those that were behind the change of their phones’ controls. The latter were backed up by common sense and interests of their users, while these days there are no real cause or goal. These recent changes are driven purely by Sony Ericsson’s inability to believe in what they are doing or create something innovative and unique, something that they’ll be able to pride themselves on. Sony Ericsson of today don’t want to get out of their comfort zone and venture to create something new, their current strategy is to copy solutions designed by their competitors.

But they remain inconsistent and stay true to their nonsensical policy even when copying something – for example, they are not implementing the 3.5 mm audio jack into all music phones, but rather in selected models, like the W995. Furthermore, a bit later on, they will dump Fast Port and replace it with microUSB. As for the three phones that were announced last week, they simply didn’t have the courage to throw it in there; otherwise the reaction would have been even more negative.

Inside Sony Ericsson there is a great deal of turmoil as their phones are. Back when the company was driven by the old management team, there was a clear-cut development plan – they thought that in 2008-2010 they market would see a booming demand for touchscreen-enabled phones. In order not to let this opportunity pass by, Sony Ericsson tried to squeeze everything they could out of their assets. They considered turning A200 into a full-fledged alternative to S60, so they started to seek for ways to tack a touch-friendly UI onto A200 (their efforts materialized in the form of the Sony Ericsson Z558). Apart from software enhancements and without the cost of a touch-sensitive display, the difference in price amounted to mere 2 dollars, and it had a real touch-based UI, plus there was handwriting recognition. So the future of A200 looked more than bright, the company was even planning on eventually getting to A300 through A250, that would serve as a foundation for all-touch phones with a handful of innovative feature. Two of the phones announced on May 28th are powered by A300, but is it the platform Sony Ericsson had in mind back then? Was its change log supposed to include only Walkman 4.0, pop-up windows in the Calendar and a refurbished standby screen?

It turns out, Sony Ericsson have cheated themselves – you wanted to see progress, here you go, they’ve got A300 now. But they usually neglect to mention that this fabulous A300 doesn’t offer anything new at all, or at least some of the features they meant to arm it with a couple of years ago. But the good news is that nobody has ever made any announcements with regard to A300, so in fact they don’t have any unfulfilled promises. But this self-delusion pushes the whole company into a terrible state, when they no longer have the will to create anything, and the little energy they have left is spent on drawing astonishing diagrams and presentations.

Now let’s talk about tastes. Everyone knows they do differ, but as far as Sony are concerned, design has always been one of their major selling points, same goes for Sony Ericsson. But what happened on May 28th? We were shown handsets modeled in a completely different Japanese fashion. Do you know where this idea has come from? It’s due to the fact that many European users stand in awe of Japanese phones, even though they have never saw or held one, and those who have usually don’t share these sympathies. This move could have worked out when Sony Ericsson were starting out, but they opted not to use it – back then, they banked on an international team that produced offbeat designs and boosted Sony Ericsson’s success. In 2009 they are playing a different game, but the decision to use Japanese designs was a huge mistake.

The Sony Ericsson Yari, for example, looks more like a clone of the Nokia N81 – while they have very few identical design elements, when put together they feel very similar.

This similarity stems from the spirit of these phones that Sony Ericsson overlook simply because they didn’t bother to research these matters deeply enough. But the fact of the matter is that Nokia’s Nseries line-up is designed primarily at their Japanese centre, since they need to emphasize that these models are far ahead of the rest of market, and design is only one of the ways to do that. So, without having any intentions of copying Nokia’s approach, Sony Ericsson’s desire to go “back to the beginning” has turned into a crucial misstep that will cement its reputation of a company that would rather copy someone else’s practice.

While I’m writing this, one thought is still bothering me – it seems as if Sony Ericsson are playing a “How do we ruin the company as far as possible” game. And the reason is that I see no other explanation for their swift and hysterical actions. While I really want to say a couple of words about the phones they showcased, I’m still not done with Sony Ericsson’s strategical blunders, and rest assured there are plenty left.

Phone indexing system. Sony Ericsson’s most devoted users know all the line-ups they have and how phone indexes are formed. In other words, these people know that they’ll buy something in the range of 6xx, maybe 5xx, but definitely now 3xx or lower. But now Sony Ericsson are determined to lose even this part of their audience by replacing index with codenames for all top-of-the-range solutions. The reason being that this system is superior when it comes to conveying the spirit of every phone, and codenames are easier to memorize in general.

To my mind, one should never play around with codenames when the circumstances aren’t right. The experience of Motorola, Nokia, Samsung and LG only points at the fact that codenames are in fact more catchy, but indexes are an obligatory part still. Remember the Motorola RAZR V3, Nokia 8800, LG Viewty KC900 and so on – a codename might become all the rage, like in the RAZR’s case, but at the same time, as Nokia’s experience proves, indexes are just as important.

Over at Sony Ericsson, however, decided to take a different route, leaving their products only with codenames. And while it would have made sense to use more European-style titles, in view of their phones’ target audience, they opted to go for abstract Japanese words. I’m fond of the Japanese culture, and respect this country’s traditions and language, but the decades of experience of international companies have taught us that codenames for products distributed on various markets should be selected with different mentalities in mind. For instance, it’ll be extremely difficult for a Russian to remember what means what here – I am no exception either, as I have already confused Yari with Aino a couple of times. And all that is happening on one of Sony Ericsson’s key markets.

Another example – the Sony Ericsson Idou, dubbed the Satio. So instead of a fairly catchy mnemonic “I do u” they have introduced a bunch of symbols with nothing behind them. It’s difficult to imagine someone studying the origins of this codename in an effort to figure out what Sony Ericsson really means here. At the end of the day, everything they could have been done wrong in this announcement was done wrong.

Moving on. Let’s see what Sony Ericsson themselves think of these phones. As far as the junior models are concerned, they threw in the word «revolutionize» with regard to music and gaming experience. But they should know that “revolutionize” is a pretty strong word to use in this particular instance, for these solutions bring nothing revolutionary to the table, expect for the Aino, which is a goo example of how Sony Ericsson reinvent the wheel.

What’s so special about this phone? Perhaps it’s the first time in my life when I see a phone with limited touchscreen functionality. I’ve always thought that either you embed a touchscreen and it works, or you don’t, and there is no third option. Having closed the development of A200-based touch-sensitive displays a while ago, Sony Ericsson are rushing to reanimate them. But since they need to cut a dash already today, they have come up with a bizarre hybrid in the form of a regular display, but with 12 touch-sensitive dots. Apparently, this setup simply won’t work in all menus – in the Aino it only allows to control the music player and camera application, as well as answer calls with bare fingers, but that’s about it. All in all, it’d be ludicrous to call this phone a “touchscreen-enabled” device, it’s not. But once again Sony Ericsson are trying to cover things up with an extended sales package – both a desktop stand and a wireless stereo-headset come boxed with the Aino. Of course they have padded the phone’s price tag up to 450 Euro, but it’s nothing, right?

Needless to say that even in my worse nightmares I could never imagine that such a hybrid would see release in the first place, let alone become one of the company’s key offerings. However over at Sony Ericsson they have a different point of view – Sony Ericsson UK's Nathan Vautier claims that their devices will change the rules in the market and will catapult Sony Ericsson back into the black. Although it’s worth noting that as it stands today Sony Ericsson have been losing money for several quarters in a row and now asking for 100 million Euros of shareholders’ money just to stay afloat, otherwise their money will start disappearing at an even faster rate.

Nathan’s words were interpreted as a taunt by the unenlightened part of the audience, so a myriad of parodies spread across the Web shortly thereafter. Like this one: the Apple iPhone will have to make way for the greatest phone of all time, no doubt about that.

Sony Ericsson have become prisoners to self-deception, trying to convince themselves that the company is doing great. In fact, self-deception has turned into a part of their corporate culture – reports about non-existent enormous market shares are sent straight to the top executives and this leads to terrifying consequences. Do you want to learn the biggest secret of Sony Ericsson and the reason why their phones have such hefty price tags?

Unlike Nokia, Samsung and LG, the company has never had own manufacturing facilities. They have placed orders for the production of their phones at other factories. However this has nothing to do with ODM production though, when even phone development is outsourced to other companies. So, Sony Ericsson sketch all phones on their own, but let third-party manufacturers produce them, and there are a couple of key stages, where Sony Ericsson must supervise quality, ditch flawed phones and make sure everything goes their way. However lately they have been losing control over these areas, and the reason is pretty simple – their partners don’t like how they are treated. That’s why we got the C905 with flawed runners (new shipments have the same kind of defect, and furthermore, Sony Ericsson are not going to fix it, since the C905 is to be taken out of production very soon), wobbly casings in other phones and so on. This prompts the question: what their partners are so unhappy about?

Production volumes. All contracts are centered on the level of utilization of production facilities. So when calculating costs, they take the total production volume into account. Think of it as a discount granted to a wholesaler. Now, what happened when Sony Ericsson’s portfolio started to expand? Production volumes per model decreased greatly, however the total number of phones in the range made up for that with ease, and there were no grudges between the parties. But As Sony Ericsson’s sales began to decline, the production volumes had to be cut, whereas both their plans and contracts with manufacturers featured substantially bigger numbers. In an effort to use the financial meltdown as a cover, Sony Ericsson insisted on keeping the prices stated in the above-mentioned contracts, while their partners started to cut their expenses on all fronts, including product quality. As it stands to today, Sony Ericsson have turned into a helpless observer. It’s simple, really: if they want to get top-quality products, they have to pay accordingly, otherwise, they’ll get only as much as the fixed prices and constantly dropping production volumes allow. Unfortunately, there is no way out of this situation – their sales volume will keep falling down, as the company can offer neither quality nor functionality. Then only chance for them to solve this problem is to finally get a grip on themselves.

But it wouldn’t be fare to blame Sony Ericsson’s partners alone, because their main problem lies in flawed planning, and to be more precise the lack thereof. Take, for example, the results of their latest announcement. You think that Sony Ericsson’s PR department reported to the executives that Yari, Aino and Satio received a somewhat cold welcome? Not a chance – as they pictured it, consumers were elated to see these revolutionary products, in fact the reception was so great, that it'd have made sense to produce more units than originally planned. So at the end of the day, the company’s executives will reward the organizers of the launch event, the entire marketing division along with the planning department. And of course nobody will feel bad about these phones’ Xperia-grade sales. By the way, now the company acknowledges that this product was a mistake and failed to live up to their hopes. And furthermore, they are experiencing certain difficulties with the X2 as well – the thing is, HTC have already refused to produce it, for Sony Ericsson failed to fulfill their X1 contracts. And their other partner insists on iron-clad contacts, which Sony Ericsson isn’t quite ready to sign, since they do realize that their plans will see numerous corrections down the line, just as always.

And we, ordinary consumers, are the final piece of this long chain, left to wonder about the outrageous pricing policy implemented by Sony Ericsson. The missteps listed above won’t let the company drop prices to more affordable levels any time soon. And when the sales of the Aino or Satio will stall, Sony Ericsson will try to send their prices through the floor just to keep them afloat, but I have all reasons to believe these extreme measures won’t have any effect, since even on the launch day the market didn’t seem stunned by these phones at all. But that’s not the biggest disappointment of the day – I haven’t mentioned it anywhere yet, but the Satio won’t come equipped with Sony’s Exmor sensor. Unfortunately.

I must confess that this is one of those rare cases when I had to forget about the original purpose of the Spillikins, devoting the entire article to one company and one event only. And the reason is that Sony Ericsson’s launch event held on May 28th literally left me speechless. It’s a pity, though, now that I’m about to wrap it all up, I have no time or room left to take a quick look at other phones and events.

Eldar Murtazin ([email protected])
Translated by Oleg Kononosov ([email protected])

Published — 10 June 2009

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