The latest news development reported by Wall Street Journal on Sony the Consumer Electronics giant possibly nearing the deal to buy out Telefon AB L.M. Ericsson's stake in their mobile-phone joint venture has opened up the potential for a new bigger player in this connected ecosystem race.
What is the key driver of this development? It is the need to build, expand and control the future connected ecosystem.
Post the 2009 recession, in the last two years we have seen the mobile devices landscape quickly shifting towards fast growing smartphones. This coincides well with the growing internet revolution as consumers are familiarizing themselves with the concept of accessing the internet for almost everything and from almost everywhere.
Apple has no doubt led the way benefitting from the vision of one of the greatest technical evangelist and entrepreneur Mr. Steve Jobs who will be deeply missed, in building the world's leading app-centric ecosystem. Apple has leveraged the internet by stitching the applications and services with intuitive hardware and building a highly synergized business model across the entire portfolio of devices from smartphones, iPods, MacBooks to TV (Apple TV), etc. The future is no doubt going to be dictated by players such as Apple, Samsung who are way ahead in hardware-connected-ecosystem race as well as collaboration with internet and software giants such as Google, Microsoft, Amazon, Yahoo who themselves are too fighting for presence across each device and each screen in the software-connected-ecosystem battle. However, Apple is an exception as it is a highly vertically integrated with footprint across hardware, software as well as services.
Sony's renewed interest to rope in Sony-Ericsson under "Sony" branded umbrella, the vendor definitely offers some promise here in its first step towards streamlining and extending control across all its products and will put life back into struggling Sony Ericsson's mind-share, market-share and brand-share. Sony cannot be discounted as a growth player who could become a top vertically integrated player and compete closely with likes of Samsung and Apple leveraging its cutting edge hardware (TV, PSP Game Consoles, Smartphones, Tablets, Laptops, Cameras, Music Players, Blu-Ray Players, Semiconductor, Display and Optics Components) as well as popular content services (Music, Movies, Games, etc.) portfolio. With this acquisition Sony will close-in gap with Samsung, but to become Apple, the next steps for Sony should be:
1. Android is a good solution for short-term but for long-term Sony should own a differentiated platform offering unique top-notch user-experience and which can seamlessly tie in its entire promising portfolio.
2. Next step will definitely be to cash in by building a robust advertising and digital content sales channel via the above platform. This will also ward off any risk of competitors subsidizing the services using advertising causing potential revenue losses to Sony.
In light of this, for hardware OEMs (Nokia, HTC, etc.) and other software players (Amazon, etc.), the list of big potential ecosystem competitors has grown further - Apple, Samsung, Google, Microsoft and now Sony.