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Sony Ericsson, like Motorola, needs to make a splash this fall with new handsets that can convince the market it is on the road to recovery, and can reduce its dependence on the difficult midrange market, especially as smartphone capabilities start to penetrate that base. Not that SEMC's cupboard is bare like Motorola's, with the popular Walkman line still being enhanced - despite the bizarre decision to defocus on the brand itself, just as the music player hits its thirtieth birthday. SEMC is placing high hopes on its new all-singing smartphone, the Satio, but many believe it is also closer, despite internal wranglings with co-parent Sony, to launching a phone version of the PlayStation Portable.

The last couple of weeks have been full of revived PSP phone rumors. Even though this would mark a retreat from the recently articulated strategy of producing phones that integrate many functions, rather than those optimized for functions like music or gaming, a PSP device would certainly put SEMC back in the spotlight and support new capabilities like remote access to a PlayStation 3. It could even be the joint venture's breakthrough device for the hostile north American market.

For now, though, the firm is focused on more mundane matters such as improving its own efficiency, in order to be more competitive with Nokia and Samsung, and try to address the growing market share gap with LG, now in a firm third place. SEMC plans to reorganize its European operations and management, creating two new 'clusters' in order to support more flexible and agile behaviour, target different operators more precisely, and boost efficiency.

The two new groups consist of selected European territories where SEMC believes particular work is required, and their primary goal will be to cultivate closer ties with key carriers in those regions. One cluster consists of the Austrian, Dutch, German and Swiss markets, headed up by Luc van Huystee and presumably focused heavily on Deutsche Telekom/T-Mobile. The second groups Belgium, Luxembourg and France will be run by Pierre Perron.

"By grouping these important western European markets, in this way, we are able to drive greater operational synergies, especially in how we can support our operator customers and consumers going forward," said Kristian Tear, head of wesetern Europe and global customer operations at Sony Ericsson.

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