Change at the top for Sony Ericsson

by Caroline Gabriel

Turmoil all round in the smartphone market this week – Sony Ericsson (SEMC) undergoes further disruption as its president steps down; Palm and Nokia are both feeling the wrath of stock analysts; while Samsung has “a long way to go in the cellphone market”, though that’s a judgement that comes from its own mobile chief, and may not be shared by some of the beleaguered rivals whose market share it is relentlessly stealing.

Sony Ericsson’s president Dick Komiyama is to retire from the company at the end of the year, and will be replaced by Bert Nordberg, currently head of Ericsson Silicon Valley, who will assume the role of co-president on 15 October. The transition comes at an interesting time, when the success of SEMC’s ongoing refocusing is far from assured, and the joint venture remains vulnerable to over-exposure to the pressurised midrange market, and to possible loss of commitment from one or both of its parents (though both have recently reiterated their determination to stay in the JV, and confidence that it could raise additional financing if required).

Like Motorola, SEMC has been losing market share steadily, mainly to the Korean duo, but also to smartphone specialists and low end vendors – reflecting its relative weakness in the two growth segments of the industry. Also like Motorola, it is hoping for a turnaround, starting in Q4, based on its first Android launches and a program of cost efficiencies. It is also banking heavily on its Satio and Aino high end mediaphones, which run Symbian.

Komiyama’s leadership will largely be judged in retrospect, by whether these plans, which he put in place, deliver the required results in late 2009 and through 2010. So far, the jury will be very much out. “The Sony Ericsson transformation program I began over a year ago is more than halfway completed, and I am pleased with what we have achieved so far,” Komiyama said in his statement. “I believe it is the right time for me to begin transferring the leadership of the company to a person who is able to complete the transformation program and lead Sony Ericsson through its next phase of development.”

Nordberg is an intriguing choice. Coming from the Ericsson side, he makes a statement of the Swedish company’s commitment to the JV (Sony’s CEO Howard Stringer will replace Ericsson CEO Carl-Henric Svanberg, who is leaving soon, as chairman of Sony Ericsson’s board on 15 October.) Nordberg’s role at Ericsson Silicon Valley, soon to become the giant’s largest R&D center, overtaking Sweden, sends out signals that SEMC will get more aggressive about the US market, where it has minimal presence.

Nordberg brings a hugely wide range of operational experience as well as an engineering background, though he has no track record in devices or consumer electronics. However, he has strong experience of carrier relationships, which could be vital to building bridges with US cellcos, and of sales and marketing. He joined Ericsson in 1996 as head of enterprise services and before the Silicon Valley post, he was EVP of group sales and marketing for four years, having run the systems, the global services and the operator services units before that.

He commented: “Sony Ericsson has taken the lead in musicphones and cameraphones with the Cybershot and the Walkman, but there are some weaknesses in the smartphone segment and we need to restore that.”

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