In cost and performance, a step back for Sony Ericsson

X8, much cheaper than X10, will be available in the next quarter

With most of its profits coming from the hi-value segment, and not from volumes, Sony Ericsson is looking at crowding the market for smart phones with offers that fit the requirements of cost, performance and size to varying degrees.

Having launched Xperia X10, its hi-end phone on the Android platform, keeping only performance in mind, and the mini and mini pro versions for those who prefer a smaller size for a lesser price, Sony Ericsson is now taking a step back, cost-wise and performance-wise, with X8.

While the demand for smart phones is going up, the market remains price-sensitive. Thus, while entry-level phones won't do for a large number of consumers, this doesn't mean that the cost is no longer a decisive factor. X8, expected to be priced between Rs.12,000 and Rs.14,000, and to be available in the next quarter, was unveiled at Sony Ericsson's global launch in Singapore.

Not counting Xperia X1 and X2, both on the Windows platform and at the hi-end, Sony Ericsson will now have four Xperia models on the Android platform. Steve Walker, head of global product marketing, told a visiting group of journalists flown in by Sony Ericsson that cost and performance are not the only factors; size too matters. While there are those who seek a bigger display screen, there are others who want a handier size. And if that comes at a lesser price, so much the better.

According to Mr. Walker, Sony Ericsson will continue working with the Windows and Symbian operating systems, although the latest offerings under Xperia are all with Android. All the four Xperia phones will receive software upgrades in specific markets.

As Xperia is now as good as being co-branded with Android, X2 might be the last Windows-based mobile under the Xperia label. Aspen remains the latest on the Windows Mobile platform. Any further offerings, it appears, might have to wait till the launch of Windows Mobile 7.1.

Explaining why the future is in smart phones, Anurag Kontu, head of marketing, India, says 67 per cent of the profit for mobile phone manufacturers comes from just 20 per cent of the sales volume. The low-end phones, accounting for 80 per cent of the sales in India, contribute only about one-third of the profits. As those with entry-level phones seek an upgrade, the market for smart phones will continue to expand.

With India ready for a 3G boom, the future clearly points to smart phones. Furthermore, users might increasingly seek to use their mobile phones as a connecting modem for their laptops, he adds.

Budget device

Another 3G offering from Sony Ericsson announced in Singapore last week is Cedar, a budget device for those seeking to combine business and social networking. Yendo, the first full touch offering from the Walkman series, is also due to be launched in the next quarter.