Sony Ericsson Case Study

The mobile telephone company “Sony Ericsson” was formed in 2001 by Ericsson and Sony as a result of two coincidental serious crisis. The first one was related with Ericsson mobile telephone operations. Ericsson has its roots as far back as the 1930s and in the mid 1990s, when mobile telephone use took off, it became a major player.

Ericsson enjoyed a major market share of sales within few years and by 1993, it had sold 8 lakh phones. The sales enormously increased and the number reached 32 million by 1999. But the success of Ericsson was short-lived. The telephone started developing technical problems. There were a huge number of complaints in the following three years and thereby its market share declined rapidly. In 2000, the company reported

Sony which was the market leader in making cameras used it technology and released the world’s first 8 Megapixels phone ‘Sony Ericsson C905’ in 2007. There was a huge demand for these phones as owning a phone having such good camera quality was a status symbol. The company was then highly inspired and unveiled “SATIO”, the first 12 Megapixels phone by Sony Ericsson at Mobile World Congress 2009. The company tried to earn goodwill by sponsoring the WTA Tour with a deal worth Eighty-Eight million US Dollars (US $88 million) over six years. It also announced sponsorship of West Indian batsmen Chris Gayle and Ramnaresh Sarwan. The company did not even taste the success properly as the launch of Apple’s Iphone in the third quarter of 2007 pulled it down to the struggling phase again. The demand for its handsets fell down from 30.8 million to only 8.1 million.

Company started suffering huge losses and there was a considerable shrinkage in the cash reserve from 2.2 billion to 599 million. The position of the Sony Ericsson in the market was eclipsed initially by Apple’s Iphone and later by Google’s