Ericsson telecom insiders take over Sony Ericsson to save it from collapse

Staska  By on 17 Aug 09

Shareholders have finally got fed up with the mess that is Sony Ericsson right now, and decided to do something about it.

The current management team at SE, lead by Hideki (Dick) Komiyama, consumer electronics sales veteran from Sony, totally screwed up in mobile market.

They haven’t been able to come up with a single hit product in years, missing industry trends, losing sales (down 40%+ in a year), market share (now at 4.7% worldwide)and tons of money (500 mil.+ EUR in 2009 so far) in the process. The current Sony Ericsson balance sheet shows that they have about 965 million Euro in cash and short term cash investments on hand, which, at current burn rate, will not last even a year.

I guess, making and selling mobile phones is really a very different thing then selling TV’s, media players and camcorders.

With their joint venture teetering on the brink of irrelevance, and even insolvency, the powers that be at SE decided that it’s time for the telecom industry  insiders to take over from CE salesmen, and try  to turn around of  what’s left of Sony Ericsson. Enter Bert Nordberg, currently Executive Vice President of the Ericsson Group and Head of Ericsson Silicon Valley, who becomes SE co-president on 1st of September, and will completely replace Komiyama on Oct. 15th.

New Sony Ericsson president Bert Nordberg

I’m sure more replacements in key SE positions are soon to come.

With Ericsson side of joint venture taking over day to day operations of Sony Ericsson, Sony’s Chairman, CEO and President Sir Howard Stringer get’s the supervisory Chairman of the Board spot at SE, replacing current Ericsson CEO Carl-Henric Svanberg.

All the corporate pleasantries and PR speak about current successful transformation aside, the current SE product line-up shows that Mr. Nordberg has a pretty daunting task ahead of him.

While Sony Ericsson has some pretty impressive products like Symbian based Satio, Android based Rachael/Xperia and Windows Mobile Xperia X2 in the pipeline, at a price points of above 500 or even 600 Euro, none of them are likely to become “smash-hits” Mr. Nordberg is looking for. And, with all the people that already left the company, plus turmoil the management shake-up will produce there, it can be more then a year until anything really new and “smashy” comes out.

The good news is, that it looks that the company and it’s shareholders now understand and are prepared to do what is needed. Which, according to one person who has seen some internal SE strategy papers, include the shareholder loan of around 450 million Euro to keep the company running through 2010, until the revenues from new products in the end of 2010/ beginning of 2011 kick-in.

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  • Phillip

    The article seems interesting until you find the author using “then” everywhere “than” should be used. Then all credibility lost.

  • Phillip

    The article seems interesting until you find the author using “then” everywhere “than” should be used. Then all credibility lost.

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