Jan Wareby, who will take the reins as president of Ericsson's new Multimedia business unit on January 1st, has spent his entire 26-year telecom career at Ericsson. Wareby was called to this post from his position as corporate executive vice president and head of sales and marketing at Sony Ericsson, the successful joint venture between Sony and Ericsson he helped form in 2001. The JV struggled at first, with plenty of critics predicting its demise due to culture clash and the sheer difficulty of bringing together a business of this magnitude as a 50-50 joint venture. However, Sony Ericsson made its parents proud last quarter. It shipped nearly 20 million handsets during the quarter, a 43 percent year-over-year increase, and sailed past LG to become the No. 4 handset player in the world. I spoke with Mr. Wareby this week about Sony Ericsson's resurrection and his next challenge in Ericsson's Multimedia business. -Lynnette
The joint venture between Sony and Ericsson is the first successful partnership we've seen between two handset players. What would you say is the secret to this success?
It's probably one of the few 50-50 joint ventures of this magnitude that has been successful. It wasn't easy but there were a couple of key factors. Both companies came into this joint venture convinced that they really needed to be in the mobile handset market. For Ericsson, it was an important part of the telecom value chain. Sony was on the other side of the spectrum, since they play in the consumer space. They saw handsets as a way to reach different consumer groups around the world and as a strategic distributor of content for the music and movie industries. The two companies were also highly complementary. Ericsson had the technology component, the know-how in making phones. It had the high-volume experience, and we were bigger than Sony in those days. Ericsson also had telecom relationships with operators and the mobile industry, more or less with every operator around the world. Sony was able to capitalize on the fact that mobile phones were moving to bigger displays and were going to include music and video technology and all that goes with consumer electronics. And Ericsson was in most places globally but not in Japan, while the Sony mobile phone group was struggling to move outside of Japan.
What about cultural differences?
It's always easy to say that Ericsson is a Swedish company and Sony is a Japanese one. But we focused on company culture rather than national culture, and we were much more similar than we were different. Both companies are very technology and product driven, and the management style was very similar. There was very little debate over how to run the company. It came down to a few Scandinavians and Japanese in top management, and we learned how to work with each other.
What sort of strategy did you lay down on the sales and marketing side to propel this JV?
We had a few key strategies. One of the keys was to lay down some simple core strategies from the start and stick with them. We said from the beginning that the clear vision was that we had to come up with something new on the product side. Handsets had to be design-driven and very much a wow product--really a different product in the marketplace. But we also said that we couldn't only be in the product business. We had to look at every product as more of a proposition. We decided to focus on three areas: imaging, entertainment and connectivity, utilizing our lead in Bluetooth and branching out into the enterprise. We stuck to those three core areas. We've been working diligently on each product group to have a clear idea of how to stick out from the other 250 handsets on the shelf. Over time, we've refined it, with the Walkman brand for music and Cyber-shot for imaging. This type of sub-branding is really a win-win. Early on, we looked at service providers and some serious customization. We took the position that to play in this game, you had to go big and get in with the big operators. We used some of our relationships on the Ericsson side and focused on a lot of retail from the start. From there, we had a product-led marketing strategy. We let the product lead our brand. Over time, we shifted toward investing more in the brands. We are just a couple months into our new campaign where we use our identity, the green ball, as the lead in communicating our brand.
What is a realistic view of what a "media device" will be going forward?
There has been enormous success for music phones but still, 90 percent of music is downloaded on PC or ripped from CDs and transferred to the phone. You shouldn't have to transfer things like that. You should touch the music you like from the phone. You need a very good quality color display, and I see new high-speed data technology as very important to enabling those services. Probably, the most important is the user interface. You can have all of this great stuff, but if people can't get to it intuitively, people won't use it.
How has your position at Sony Ericsson readied you for your new role as head of Ericsson's new Multimedia business unit?
I will be taking core network technology to the market, and it's very much driven by what can be done technologically and what can be added in this to become important in the multimedia world, to help operators compete. We'll be working closely with operators in driving successful campaigns, and phones will play a key factor in that. Sony Ericsson is key to the Ericsson multimedia strategy. So far, most of this business is voice, but a lot of the technology is there now. Only that doesn't help because there have to be consumers who want to use it. Ericsson really wants to be a part of this new segment that borders between the media world and the consumer industry. The goal is to create growth.
Jan Wareby Dossier
Favorite mobile app: I use the K800 quite a bit, to post photos automatically through a blog. I would have never created a blog if it wasn't for this phone. My daughters like to keep track of what I'm doing.
Current reading: I'm not a big book reader, but I read lots of magazines.
Favorite web site: www.sonyericsson.com
Latest project: Heading up Ericsson's new Multimedia business.