10/29/2008 12:34:00 PM
The rise and fall of handset manufaturers
Handset manufacturers, like politicians, come and go. They climb to prominence with rapidity and ease then, with the world at their feet, they disappear from view almost as fast. The question I would love to ask is why? Sony Ericsson is the latest to find itself staring at the slippery slope of decline. Our feature details some of the challenges it faces after a summer of awful results. To compound its difficulties its handsets have been exhibiting reliability problems. From a company that was once the handset manufacturers’ answer to Volvo, it is a surprising development.
But why is it manufacturers have such a tendency to rise and fall? It seems they become flushed with success and then become complacent and allow things to fall apart. Motorola did it a few years back after pulling the V3 out of the bag. Sony Ericsson (who everyone thought would learn from Motorola’s mistakes) didn’t build on the success of the Cyber-shot and Walkman. And if we really want to go back into history, Siemens conquered all with the wonderful SL45 and then lost the plot.
We could be kind and say it’s because the making of handsets is a research and development focused business where bets are placed far in advance, and any wrong moves take time to recover from. That’s far too kind, however. Car manufacturers have far bigger challenges yet the major names continue to produce fantastic products and retain their place in the pecking order. There are also exceptions to the rule in mobile, such as Nokia.
And that throws open the question of how long other rising manufacturers can hold their gains. Samsung has recently claimed leadership in market share. The acid test will be not where it is at Christmas, but where it stands this time in two years.