Sony acquired Telefonaktiebolaget LM Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB and officially turned the latter into a wholly-owned subsidiary in mid-February. The acquisition gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronic devices.[Photo/China Daily]

Move seen as first step in order to integrate all its visual devices

BEIJING - Sony Corp, the Japanese consumer electronics giant, may possibly gain a bigger share in the Chinese smartphone market with its integrated services, industrial experts said.

Sony, which acquired Telefonaktiebolaget LM Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB and officially turned the latter into a wholly-owned subsidiary in mid-February, has already introduced its first own-branded mobile phones in 10 years.

"The acquisition gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronic devices," said Magnus Ahlqvist, president of Sony Ericsson China. The company has now renamed itself Sony Mobile Communications AB China.

Ahlqvist said there is a trend that people like to enjoy content and services through multi-screens, including smartphones, tablets, televisions and personal computers. "Through our many devices, people can enjoy all Sony's content - from movies to music and games - in a way no one else can," he said.

After the transaction, Sony sees no major strategy change toward China, the world's biggest mobile market with about 986 million mobile phone users.

"We hope China could be the biggest market (for Sony Mobile)... The clear information we want to deliver is that we make the most entertaining smartphones," said Ahlqvist. In addition, Sony Mobile has a global research and development center and an operations center in Beijing, which may help develop and add Chinese elements to its smartphones.

The Beijing center will have almost 2,000 staff, second only to the research and development center in Sweden. It will design and develop more than half of Sony Mobile's new products worldwide. The TD-LTE devices are likely to be developed in the Beijing center, too, according to Ahlqvist.

Liu Jian, an analyst with Beijing-based research firm Analysys International, said Sony Mobile may achieve a brighter future than Sony Ericsson. Compared with Sony, which is one of the most comprehensive entertainment companies in the world, other handset makers fall behind because they are short of a complete portfolio, Liu said.

"After the acquisition, Sony has the ability to quickly capture and respond to the market call, which is critical for competing in China, where the competition is intense," said Liu. Chinese customers are familiar with the Sony brand thanks to the company's lengthy presence in the Chinese market.

Previously, Sony Ericsson gained a market share of 3 percent in the fourth quarter of 2011 in the Chinese market, ranking it the 10th mobile phone manufacturer, according to Analysys International. Samsung Electronics Co topped the list with a 22 percent market share.

Nick Dillon, a devices and platforms analyst with research company Ovum, wrote in a research note that Sony now faces the challenge of knitting its components together to create a compelling integrated offering. "(It is) an area in which Sony has yet to excel," Dillon said.

However, Sony's acquisition and the launch of their own-branded smartphones formed the first necessary step for leading to a potential success. "It marks the start of a new era for Sony as it positions itself to battle with other multiscreen players in the increasingly competitive and interlinked consumer electronics markets," said Dillon.

In China, the smartphone market has great potential because the feature phone has so far maintained a lion's share of the market. The rapid development of 3G network services has prompted Chinese people to choose a rich-function smartphone rather than a simple feature phone.

The number of 3G network service subscribers in China was 128 million by the end of 2011, according to statistics from telecom operators. Analysys International predicts the figure will exceed 300 million this year, with an expected total Chinese mobile population of 1.11 billion by the end of 2012.