Sony Ericsson's Walkman phone in short supply

reuters.com | Wed Sep 28, 2005 8:46 AM ET167

AMSTERDAM (Reuters) - Sony Ericsson has trouble meeting demand in Europe for some of its latest models, such as its first Walkman phone, due to popular demand, analysts said on Wednesday, but the firm denied there were logistical problems.

"Sony Ericsson's W800 Walkman phone and the K750 are seeing healthy demand in distribution and retail. They are in short supply at retail," said analyst Ben Wood at market research group Gartner, who tracks the global mobile handset industry.

Sony Ericsson's W800 phone is the first phone that uses Sony's revived Walkman brand, which was first launched in 1979 and went on to sell more than 340 million of the cassette players.

The K750 model features a 2 megapixel high-quality photo camera with autofocus.

Sony Ericsson said it could sell more of the 400 euro Walkman phones if it could supply them.

"We could probably sell tonnes more if we had them," a spokesman for the Japanese-Swedish firm said, declining to give details of shipments.

But he said there were no logistical issues or supply chain problems that squeezed supply. Sony Ericsson has had problems in the past of meeting demand due to logistical problems.

The 50:50 handset venture between Sony Corp (6758.T: Quote, Profile, Research) and Ericsson (ERICb.ST: Quote, Profile, Research) has decided to produce all Walkman phones in its own factories, and not rely on contract manufacturers such as Flextronics (FLEX.O: Quote, Profile, Research) which are used for other models.

Market research group Strategy Analytics estimates Sony Ericsson will sell 1 million Walkman phones in the 4.5 months between the launch and the end of the year, half of the estimated 2 million ROKR music phones made by Motorola (MOT.N: Quote, Profile, Research), which can play songs from Apple's (AAPL.O: Quote, Profile, Research) iTunes store.

But sources close to Sony Ericsson said internal plans are for much higher sales.

Sony Ericsson is the world's number five phone maker. It focuses on more expensive models and has a 6.2 percent share of the market of 780 million units a year.

The Japanese-Swedish joint venture was one of the first top five phone brands out of the gates with a dedicated music phone when its Walkman phone hit the shop shelves in mid-August. It is the first model in a range of Walkman phones that will eventually be able to download music from Internet music stores.

Nokia (NOK1V.HE: Quote, Profile, Research) has announced mass storage music phones that will be able to link to Internet music stores.

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