docomo-xperia

Android Helps Sony Ericsson Make a Profit Finally

July 19, 2010 - Written By Chris Yackulic

Sony Ericsson finally seems to be on the right track. The mobile phone maker earlier Friday reported its second quarterly net profit in a row following several quarters of falling market share and heavy losses, helped by cost cuts and successful launches of new premium phones.

The handset vendor recently ramped up its high-end presence with devices like the Xperia X10 flagship phone, and over the past two years has slashed its workforce by a third, to around 8,000. Though Sony Ericsson’s sales volume and market share fell in the second quarter from a year ago, at least the trimmed-down company managed to make a profit this time.

he return to profitability builds a lot on Android, Google’s fast-spreading mobile operating system. Consumers have so far flocked to Sony Ericsson’s Android-based Xperia X10 and X10 mini smartphones, which make good use of the platform’s slick user interface and its support for online downloads of additional applications. Chief Executive Bert Nordberg says his company will make heavy use of Android in coming premium phones as well.

Indeed, Android looks like an increasingly potent challenger to rival mobile platforms like Apple’s iPhone OS, Research in Motion’s BlackBerry OS and Symbian, which is used in most of Nokia’s smartphones. As a growing number of handset vendors across the globe opted to use the open-source platforms in their devices, Android’s market share surged to 9.6% in the first quarter this year from 1.6% a year earlier, according to research firm Gartner.

While Sony Ericsson puts a lot of faith in Android, Finnish rival Nokia has remained firmly committed to Symbian despite criticism from some market watchers that the platform is slow and clumsy. The global handset market leader has lost ground in the premium segment amid the fierce high-end competition, but hopes that new phone launches based on an upgraded Symbian version will help it fight back later this year.

As for Sony Ericsson, CEO Bert Nordberg believes the company will probably stop building phones around either Symbian or Windows Mobile, which it currently uses in handsets such as the Vivaz and Aspen. As Android devices get cheaper, they will move into the other systems’ price range as well.

The question is whether Sony Ericsson’s focus on entertainment features, its new hardware design and its recently launched compact smartphones will be enough to differentiate its product range from all the other Android devices in the market.

In either case, its bet on Google’s operating system seems so far to have been a good one, judging by the past few months’ turnaround.