Five agencies are believed to be competing, including dual incumbents Dentsu and Hakuhodo, as well as McCann Erickson.
While no information as to the reason behind the pitch has been confirmed, the decision follows a steady drop in the company’s market share in Japan, which currently stands at 6.3 per cent.
Sony Ericsson has fallen behind competitors such as Sharp, which as the leading brand commands more than 20 per cent of the market. It also trails Panasonic, NEC, Fujitsu and Toshiba.
Michito Kimura, a senior market analyst at research firm IDC Japan, said that this year was proving challenging for all handset companies in the market. The industry has been experiencing a downturn after a strong 12 months between 2006 and 2007. “So far there are no clear winners,” Kimura said.
The industry’s change in fortunes is largely due to a new Government regulation preventing mobile operators from offering heavy sales subsidies to attract new customers. The previous, fiercely competitive system was an important factor in driving consumer demand.
Sony Ericsson has run into difficulty despite the incorporation of Sony brands - including Walkman, Cyber-shot and most recently Bravia - into its mobile handset product range.
Likening the brand to Motorola, Kimura said that despite having built a loyal consumer base through strong branding focusing on a young demographic, Sony Ericsson was now suffering as a result of over-reliance on its former “uniqueness of product” and lack of innovation.
He noted that the company had cut back sharply on advertising last year, while poor sales had led to a weakening in its relationship with NTT DoCoMo, its principal operating partner along with KDDI’s network au.
Citing a recent agreement to outsource hardware to NEC, he said that it would be “very, very difficult” for the company to turn its fortunes around in Japan and that it was likely to continue to reduce its operations in the market to put “more energy into the rest of the world”.
Sony Ericsson seeks Japanese brand revival
TOKYO - Mobile handset maker Sony Ericsson has called a review of its creative and media business in Japan as it attempts to boost its flagging presence in the market.
