A Phone by Any Other Name

March 1, 2006 -- -- High atop the Manhattan skyline, on the 35th floor of the Sony America Corporate offices, a virtual flash of innovation was introduced into the mobile phone world. Or was it a bold marketing pronouncement meant to shake up the handset marketplace for the coming year?

Sony Ericsson unveiled its ever-expanding product grid for the next 12 months, including a phone integrated with a Cybershot 3.2-megapixel camera that may be the push the fledgling handset maker needs to be considered a major player in the billion-dollar personal communications business.

Sony Ericsson isn't exactly looking for handouts after selling more than 30 million devices worldwide in 2005. But the 5,000-employee team has ranked fifth in the ultra-competitive business with only 7 percent of sales. Nokia is No. 1 worldwide and Motorola is No. 1 in the United States.

Creative Fusion

In 2001, Sony and Ericsson joined forces in a venture to create cell phones for a growing marketplace.

For the last four years, the company has received numerous accolades for designing stunning handsets. It has had limited success when users seemed to lust after all the bells, whistles and innovations, but opted for the lower-end models that were available for a lower price -- the ones not necessarily produced by Sony Ericsson.

Making it up in volume worked for the cell phone manufacturers until the introduction of the hugely popular Razr phone by Motorola.

More than 12 million of the must-have phones have been sold, even at prices upward of $400. The phone has very few premium features beyond an average camera and, at times, it is offered in a smattering of limited-edition colors.

This may explain the success Sony Ericsson began to have in the final few months last year with the introduction of its multimedia-friendly, Walkman-branded phones.

Walkman is a registered trademark of Sony, but the flashy, neon-orange phone bears little resemblance to the 186 million cassette tape decks sold since 1979. Three million customers are walking around with headphones attached to their sporty, orange, music-playing Walkman phones.

Najmi Jarwala, president of Sony Ericsson North America, explained 2005 was the year of the music player at his company.

"Our goals were to introduce a credible music player for our phones with the Walkman brand," he said. "We introduced a complete set of consumer music offerings, and we drove operator revenues with easy-to-use services."

The goal for 2006 is to establish the phone as a credible digital still camera, moving it out of the gimmick realm and into the practical camera replacement realm with cutting-edge optics, practical ergonomics, and Sony Cybershot interface and branding.

Avi Greengart, who follows mobile devices trends for Current Analysis, says it's about time.

"It's a powerful move to take the popular Cybershot name and move it to the mobile devices like they did with the Walkman phones," he said. "With the branding, same user interface as the Cybershot stand-alone cameras, and good combination of features, this looks like a great product."

Greengart thinks the new branding will help, but what impresses him most are the specs.

The GSM / EDGE based K790 has 3.2-megapixel optics and a strong Xenon flash to avoid blurry nighttime shots or red eye; will play your music; and has auto focus and a feature called BestPic that will take nine still images of a moving scene and allow you to discard the eight photos that Junior had his eyes closed in.

A built-in Google search and eBlogger software to post your photos directly online from the phone are nice new data services. But the first thing you notice is the absolutely stunning 2-inch color screen. Perhaps the waiter will no longer have to run over with the camera cued up to the photo he just took for your approval but will simply show you the screen from a distance.

"When introduced, this product will be close to being able to replace the need to carry a phone and a camera," Greengart said. "Maybe for a wedding, you can bring a high-end SLR, but with the phone's image stabilization it will give you some nice 5-by-7 snapshot prints. You may miss the lack of zoom though."

What Do You Want for $600?

That's right. Your new Cybershot branded mobile phone is expected to retail for $599 when it is released in the third quarter of this year. Once carriers like Cingular and T-Mobile make agreements with the manufacturer, the price will come down -- as long as you sign on for a new or extended plan.

Sony Ericsson is the only company that sells its phones through carriers and also directly to the public "unlocked" on its Web sites. Eighty percent to 90 percent of U.S. sales are processed through the traditional carrier route, but carrier-independent online sales continue to climb.

Until the price comes down, the potential customer will likely be the high-end gadget enthusiast who doesn't mind spending $600 to be the first on the block to have the all-in-one convenience. In the meantime, Sony Ericsson has decided to become a kinder, more inclusive communication innovator with a goal of increasing its market share in 2006.

Jarwala, who until recently was the senior vice president for customer equipment at AT&T, laid out the current expectations.

"We are a tremendously successful company in Europe and Asia. The Walkman phones have been very popular. We now want to move forward toward a mass market with more options and more phones," he said. "With a diversity of designs, features and colors, we now have over 20 phones in our product offerings."

As our mobile culture continues the march toward the Holy Grail of communication delight -- perchance a device that receives e-mail, surfs the Web, allows you to talk anywhere at anytime, while being a portable jukebox, high-definition movie screen and digital camera offered at a reasonable price with a rebate -- cell phone manufacturers will continue to innovate and offer different phones with different price points and features.