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Sony finds missing puzzle piece: Smartphones

Mark Milian, CNN
The Xperia Ion for AT&T will be the first Sony phone that doesn't carry the Ericsson name.
The Xperia Ion for AT&T will be the first Sony phone that doesn't carry the Ericsson name.
STORY HIGHLIGHTS
  • Sony bought Ericsson's stake in their joint venture last year
  • Sony plans to integrate phones into its "four-screen strategy"
  • All Sony devices are expected to work seamlessly together

Las Vegas (CNN) -- Now that the company has a phone, Sony can finally answer opportunity's calls.

The Japanese tech company's latest revival efforts are partly hinged on selling customers every type of gadget, all seamlessly integrated. But without a cellular phone division to call its own until recently, Sony was missing the one electronics product that people tend to carry with them most often.

Now, a newly acquired division called Sony Mobile Communications is tasked with building smartphones that align with its parent company's strategies and plays well with other types of Sony gadgets.

Phones are not only central to how people stay connected. They can also link disparate devices together, by synchronizing over the Internet or acting as a remote control.

Sony's Music Unlimited and Video Unlimited services, which offer streaming music and video downloads, are expected to find their way into every Internet-connected gizmo Sony makes, executives said. The PlayStation Network will let users play the same games on their phones and tablets, they said. All of these services will be part of Sony Network, and users will only need to remember one login name and password.

Sony Mobile developers are working on a feature that will let people flick a video on their Sony phone's screen to be played instantly on a Sony television set, Sony Mobile head Bert Nordberg said in an interview. This ability is already built into Sony's Tablet S, which, like Sony's phones, runs Google's Android operating system.

'The same elements' as Apple

Sony engineers companywide will be required to work with the new Integrated UX Group, Kazuo Hirai, Sony's executive deputy president, said at a meeting with reporters last week. (UX is an abbreviation for "user experience," meaning how people interact with the products.)

Sony Mobile contributed some engineers to the group, Nordberg said.

"I think this is crucial," he said of the integration group.

The new committee appears to strive for the way Apple runs its businesses. It's not unusual for Apple engineers to work on phone software and then shift to the tablet and then to the Mac. Steve Jobs, the late Apple co-founder, described his company as the world's largest start-up.

"We have the same elements that Steve (Jobs) was talking about," Sony CEO Howard Stringer said at the meeting with Hirai and reporters last week. "We have far more products than anyone else."

The new Sony initiative that prompted the company to purchase a phone manufacturer is called "the four-screen strategy." (Sony also has a "lens to the living room" strategy, which describes its offerings of video production and consumption tools. Sony apparently likes for its corporate policies to have cute names.)

The four pillars of Sony's attack plan are computers, tablets, televisions and phones. Sony has had the first three. The Japanese company entered the tablet market in September, around the time when many other electronics piled in with hopes to challenge Apple's iPad.

The decline of Sony Ericsson

Sony's status in phones was complicated. It had a joint venture with Ericsson that had been slowly sinking since the iPhone launched in 2007 and reconfigured the concept of a smartphone.

Last year, Sony Ericsson was finally able to build some buzz, especially in the United States, where its market share is practically nonexistent. The Xperia Play was the first PlayStation phone, which had a slide-out controller and let players download classic console games.

The Xperia Play didn't turn out to have the impact it promised, and it wasn't a huge hit, despite being available on the two largest U.S. carriers, Verizon Wireless and AT&T.

When asked about Sony Ericsson last week, Steve Elfman, Sprint network operations president, said, "I wouldn't consider them a major hardware company."

The key opportunity for Sony was when the mobile venture posted yet another dismal financial quarter in October, and Ericsson was finally ready to sell. Less than two weeks later, Sony announced that it was purchasing Ericsson's share in the company.

Sony Ericsson is not the only cell phone manufacturer to get scooped up by a technology giant last year. Google announced plans to acquire Motorola Mobility for $12.5 billion in August.

But it was unusual for an electronics Goliath such as Sony not to be fully invested in the mobile industry. And it was perhaps unrealistic for Sony Ericsson to try to float at arm's length from its parents. Without being a part of a larger entity, the joint venture had little hope, said Nordberg, the Sony Mobile head.

"My view since I joined 2 1/2 years ago is that it's always been a Sony company," Nordberg said. "It's very hard, I think, to survive as a mobile hardware-only company."

'U.S.-first strategy'

After the adoption, Sony Mobile is focusing its efforts on the United States.

In other words, it has instituted a "U.S.-first strategy," Nordberg said.

"The U.S. has taken back the lead in the mobile industry," he said, citing deployment of fourth-generation network technology. "It's the first LTE country."

Sony announced last week at the International Consumer Electronics Show that the Xperia Ion will debut first in the United States. AT&T Mobility CEO Ralph de la Vega showed the product at his news conference.

Relations between the carrier and Sony have improved greatly, AT&T executive Glenn Lurie said in an interview. "They're making it easier to do business with Sony," Lurie said.

However, AT&T spent more time at the CES event talking about competitors' phones, and de la Vega practically hugged Microsoft CEO Steve Ballmer, who was there to promote Windows phones.

The Xperia Ion will be Sony's flagship phone for the time being, but it is still a Sony Ericsson product, Nordberg said, even though it doesn't have Ericsson's name on it. The first true Sony phone is expected to debut later this year, he said.

"Next year, I'll be up there hugging Ralph," Nordberg said with a laugh.

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