Our major investment in India is in increasing workforce, mkt share
The head of London-based JV between Japan’s Sony and Sweden’s Ericsson spoke to ET about his company’s vision for India, Apple's iPhone and why the CDMA business remains a no-no. Excerpts:
By Rashmi Pratap, TNN |
MUMBAI: Sony Ericsson president Miles Flint led a turnaround that made the company the world���s No 4 handset firm in 2006, dethroning LG Electronics. With the launch of Walkman and CyberShot phones, he has redefined the Sony Ericsson brand globally.
The head of London-based JV between Japan���s Sony and Sweden���s Ericsson spoke to ET about his company���s vision for India, Apple's iPhone and why the CDMA business remains a no-no. Excerpts:
India is the world���s fastest-growing telecom market and Sony Ericsson is the No 3 player here. How do you view the Indian market?
We started putting increased focus on India in 2006. And with a relatively modest investment, our business has trebled here. In India, we have 9% share of the GSM handset market in terms of volume and around 13% share by value. We started work last year on evaluating manufacturing here and that���s part of the more concerted strategy of focusing on India. I think there is a willingness and a welcome thrust to be here.
You have announced that basic handsets will be made in India. Isn���t it a deviation from your global strategy wherein the focus is on mid-tier and high-end phones?
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Not at all. The phones that will be manufactured here will also be sold globally. Our focus is to stay a mid-end and high-end player and to gradually bring lower price points in the market place. The first phone that will come out of the Indian manufacturing unit will be a Walkman phone.What about the pricing of the made-in-India Walkman phone?
Phones manufactured in India would range from sub-Rs 3,000 to mid-tier phones at sub-Rs 8,000.
How much is Sony Ericsson investing in India?
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The major investments are in increasing workforce and in improving market share. Flextronics and Foxcomm will work with us in Chennai. They build factories and we commission them to make phones. So it doesn���t require big capital investments on our part. There is a hub being established in Chennai, which of course is relevant for the Indian market. In course to time, it will be relevant for the Middle East and Africa.Is an R&D lab in India on the radar?
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No decision has been taken at this point of time. We are looking at diversifying our R&D. We are currently in Tokyo, Sweden, Manchester, North Carolina, increasingly in China and there is a logical discussion going on in Sony Ericsson about where would the next location would be. India is one candidate and with strong credentials and we are in the process of evaluation. But we have not reached any decision yet. Some of our software work is already subcontracted here.You are a GSM player except in Japan where you sell high-end CDMA handsets too. With good CDMA numbers being added in India, are you evaluating re-entry in CDMA?
No, we are not. The decision was taken in 2003 to close our CDMA business. CDMA handsets are inherently more costly than GSM and the world is moving towards GSM. We don���t plan to go back to CDMA business. But that doesn���t stop us from having a dialogue with CDMA operators. All over the world, we talk to them, but there���s no change in strategy.
How do you view the impact of Apple���s iPhone on Sony Ericsson?
I don't like to comment on competition. This is an industry based on constant and never ending innovation. We already have handsets with touch screen ability, 3G and high-speed data capabilities. We believe in our ability to compete. There is a trend towards the convergence of PC and mobile phones. We are very much from the telephony background and our core philosophy is that it must be a phone first. We have no intention to make a phone where telephony is a secondary aspect.
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