Sony Ericsson's Mobile Music Strategy

Sony Ericsson's Mobile Music Strategy
Case Code: BSTR215
Case Length: 19 Pages
Period: 2001-2006
Pub Date: 2006
Teaching Note: Not Available
Price: Rs.400
Organization: Sony Ericsson
Industry: Consumer Electronics
Countries: Europe, Asia
Themes: Growth Strategy, Strategic Alliances
Sony Ericsson's Mobile Music Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts

Background Note

Sony Ericsson was established in 2001 as a joint venture between Telefonaktiebolaget LM Ericsson (Ericsson), Sweden, and Sony Corporation (Sony), Japan, with both partners having 50% ownership in the company. Ericsson, a leading provider of telecommunications equipment and related services to mobile and fixed network operators globally, was established in 1876 and its headquarters were in Stockholm, Sweden.

The company was present in 140 countries and it was estimated that 40 percent of all mobile calls were made through systems supplied by Ericsson. Sony was established in 1946 in Tokyo, Japan, by Masaru Ibuka and Akio Morita.

The company's lines of business were electronics (audio, video, and information technology products & components), video gaming consoles, entertainment (motion pictures and music), and financial services (insurance and banking). The world's second largest consumer electronics company, Sony was known for several innovative products like the iconic 'Walkman', the popular 'Playstation'7 gaming console, and 'Aibo', the robot dog. Prior to the joint venture, both Ericsson and Sony were making losses in their respective mobile phone businesses. Shareholders of Ericsson demanded a sell-off of the loss making mobile business in 2001 when it made a loss of more than US$ 1 billion in the final quarter of 2000 and US$ 558 million in the first quarter of 2001. However, instead of exiting the business, Ericsson's board decided to form a joint venture with Sony. The decision was rated as the 5th best management decision in 2001 by Sunday Business....

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