By the early 2000s, the telecom industry had gone all mobile – and the customers had more options to choose from than ever before. This changed the power balance in the market. Ericsson, who had been making both phones and networks almost since its start in 1876, decided it was time to find a partner that could provide know-how and experience of consumer products to supplement the company’s technological expertise.
It found one in Japanese electronics firm Sony and together they created Sony Ericsson. Jointly owned on a 50–50 basis, they put the Sony Ericsson head office in London and started operations on 1 October 2001, incidentally the day that the world’s first 3G network opened in Japan.
Sony Ericsson focused on designing its cell phones in what is usually referred to as a Scandinavian design tradition – a style with roots from the 1950s and 1960s, and characterized by simple, sculptural elegance, material constraint and a lack of embellishments. The T610-model from 2003 was Sony Ericsson’s breakthrough as a cell phone manufacturer. It was praised – and won awards at design and trade congresses – for its smoothly functioning multimedia features, its large color display with clear graphics. The T610 became the beginning of a number of increasingly sophisticated camera models, and with it, Sony Ericsson entered the cell phone into the battle for the multimedia market, in tough competition with small digital cameras and music players, such as the iPod.
Two years after its founding, Sony Ericsson could report positive financial results. The growth continued. And by 2007, sales had risen threefold over 36 months, with 103 million phones sold and profits at SEK 15 billion. However, after this point, trends started to turn downwards.
The flagship model Xperia, or X1, launched in the autumn of 2008, didn’t become the sales success it was expected to be. It was first Sony Ericsson phone to be based on Microsoft’s Windows Mobile operating system but came with too many bugs. And it could not compete with the then new iPhone when it came to user-friendliness.
Eventually, in October 2011, Ericsson announced that Sony Ericsson would become wholly owned by Sony. One reason for this decision was that the mobile market, during the last ten years, had shifted from simple mobile telephones to function-rich smartphones with access to internet services and content. Ericsson did not any longer see synergies in operating both in telecommunication technology and consumer mobile telephones. The name of the company changed to Sony Mobile Communications and the headquarter moved to Tokyo.