Despite the billions of dollars about to be spent on 3G networks
around the world, shipments of 3G handsets are expected to make up
less than a third of all phones shipped by Sony Ericsson Mobile
Communications in 2005.
In 2005 the company expects around 20% to 30% of its handsets to be
3G telephones, with most of the rest being made up of terminals for
GPRS and CDMA-1x networks - so-called 2.5G services - said Katsumi
Ihara, president of the newly established joint venture.
The first 3G handset to carry the new company's name, a Universal
Mobile Telecommunications System (UMTS) model for the European
market, is expected to appear in the second half of 2002, said
Ihara.
A handset for the Japanese market - where commercial 3G service was
recently launched by NTT DoCoMo - is expected to be available in
the first half of 2002 although it will not carry the name of Sony
Ericsson because of restrictions placed on the company by NTT
DoCoMo.
Much of the launch schedule of 3G handsets will depend on the
availability of suitable chip-sets with which to manufacturer the
phones. Sony Ericsson is currently in discussions with as yet
unnamed chip suppliers.
Sony Ericsson Mobile Communications came into being on 1 October,
when Sony and Ericsson merged their mobile handset businesses.
The new joint company is expecting to turn a profit in 2002 despite
the slowing economic conditions, said Ihara. The imminent
introduction of GPRS services, which offer higher data transmission
speeds over a packet-based network, is expected to help the company
meet this goal.
"As we go to the new standard, new applications will emerge to
stimulate growth in the replacement market and the industry will
grow," Ihara said, adding that he expects to see growth of between
10% and 15% in the handset market. For the current year, Sony
Ericsson expects worldwide handset shipments to be around 410
million, rising to 450 million next year.
One of the company's advantages, said Ihara, comes from Sony's
significant strength in the Japanese market, where virtually all
handsets are made by domestic manufacturers. Even Nokia, which has
the largest share of the world handset market, is procuring its
latest Japanese handset from Sanyo.
If all does not go according to plan, an exit clause allows either
party to withdraw from the joint venture after five years, with an
earlier withdrawal possible if both parties agree, said Ihara.