Motorola has fallen below the positions of LG and Sony Ericsson. The second quarter’s financial statistics, when published, should clarify the situations; as for now, we are awaiting the promising ZN5 cameraphone. As for Sony Ericsson, some reports covering the company’s achievements in the current quarter have already been publishing, giving enough ground for drawing conclusions.

The company’s net profit fell well below the usual level regardless of an increase in revenues. The situation did occur in the past, back in the days of Ericsson as an independent company, but that never led to a crisis so we wouldn’t be expecting one to happen this time as well.

Seeking to cover more market niches in the mid- and hi-end sectors of the market, the company failed in the price competition; the following table illustrates the drop in the average price of sold devices. Low-end products still enjoy considerable success, which is where Nokia takes advantage due to their spacious portfolio, but Sony Ericsson can hardly offer a comparable variety.

Sony Ericsson still maintains the record of the highest average product price on the whole market. That’s why we have no expectations of the company’s approaching downfall – when Siemens was a step away from bankruptcy, this value was extremely low. The Swedish-Japanese alliance has never had strong positions on the low-end front, by and large placing their bet on all-in-one products. This autumn the expensive XPERIA X1 QWERTY PDA and the C905 cameraphone equipped with a 8.1 Mp camera are expected to appear. That’s why the bad forecasts circulating across the web make virtually no sense.

Moreover, a strategic partnership with Sagem in the sphere of low-end production was announced. The French company will be issuing solutions in the lowest market segment, branding them as Sony Ericsson but implementing their own technologies and developments. The software platform used in Sagem solutions poses strategic interest to the Sony Ericsson company. However we wouldn’t expect to see any real results from this collaboration until the end of the year.

 The sales on the European market are continuing to fall, and that is not surprising: according to the preliminary estimations, the inflation in the European area reached 4% per year, making the highest score over the past 16 years. “Our primary goal is to minimize the expenses as quickly as possible. The  measures taken now are directed at creation of a more flexible and economically effective corporate structure, able of creation of innovative products which will not leave the consumer untouched,” – stated Dick Komiyama, the President and Executive Manager of Sony Ericsson.

We already mentioned that a Japanese manager put into action on the American market outside of his profile would be performing on an average level; but this can’t overthrow the global strategy. Sony Ericsson aren’t making products worse than before – it’s just a shifting of the accents. The gap in profits is explainable by large-scale investments in research & development, initiated by the recent reorientation in UIQ. Certain rumors tell us of an active development in the sphere of touchscreen products, though no official statement was made so far.

Anyway, the numbers are quite disappointing, yet some experts predicted an even more pessimistic outcome, which even led to a declaration of war between the company and the chief editor of a renowned telecom site who published a series of articles permeated with bitter criticism, thirsting for Sony's and Ericsson's scalps. We don't think that substituting objective opinions with pure emotion is acceptable in negotiations between the representatives of media and industry. The numerous factual mistakes in the mentioned articles don’t do the wrathful author justice, misleading the reader with a jugglery of facts and fancy.

In particular, the little crusade targeted the new Walkman models announced on July, 22 – the three new handsets planned to improve the yearly statistics. Despite the unfortunate lack of 3.5 mm audio sockets and dedicated sound processing units, Walkman handsets have always enjoyed a considerable popularity with the audience. This sort of marketing is based on the company’s reputation of a music phone pioneer; the goodwill accumulated by the previous victories can hardly be degraded by minor downsides in the new products (as long as the new products offer something valuable for compensation) The situation isn’t a precedent in the history of the company, so there is little reason to worry.

A 3.5 mm socket is currently present on the feature list of XPERIA X1; this PDA is planned for release in the opening quarter of the next year. Another upcoming SE flagship, C905, will become available in November. The former appears after six months since the release of HTC Touch Pro, the latter – three months later following the release of Samsung i8510. How actual these solutions are going to be considering the circumstances is an extremely complex question. On the other hand, SE are investing enormous effort into promotions, as of late, so these investments are ought to be of real help, even if kept unannounced.