Sony Ericsson's latest...Qualcomm inside?

Xperia, the new flagship handset from Sony Ericsson, is interesting on all kinds of levels. Most intriguingly, this is the first handset from SE that boast Windows Mobile. This leaves Nokia alone in their continued thumbs down to Softie's mobile offerings. It will be interesting to hear SE's executives reasons for choosing this path.

I would also add that this is SE's most direct response to the iPhone revolution. I love the iPhone, but this combination of large scale touchscreen with a slide out keyboard is going to represent an interesting challenge for Apple. The iPhone's interface is good enough for short messages/emails, but I dont think it can compare to a full QWERTY keyboard for anything in long-form. Of course, the OS on the touchscreen is going to be key. Has Sony Ericsson been able to transfer their successful Walkman UI to the Xperia? The Walkman line of handsets has been a monster hit outside of the US and the music player is considered to be very good in offering both ease of use and advanced options for mobile users. This will repsent quite a challenge for Apple as the iPhone has failed to gain much traction in Europe. This, along with the various new handsets from LG and Samsung, really place the pressure on Apple to get v2 of the iPhone to market well ahead of Christmas '08.

Moving onto a slightly more speculative topic, this looks like confirmation of the rumor last year that HTC would be supplying Sony Ericsson with Windows Mobile devices. The form factor of the Xperia is very much like a variety of HTC products. The use of an ODM for what looks to be a flagship device might just give investors an idea as to how much handset manufacturers want to have a response to the iPhone in '08. While the identificiation of HTC as the supplier is a relatively easy call, it leads to something more substantive....the likelihood that Qualcomm is supplying the baseband for this handset. HTC's 3G lineup is universally based on Qualcomm basebands. It is possible that Sony Ericsson mandated the use of EMP for this handset, but some other specs add to the possibility of Qualcomm. When was the last time Sony designed a product that didnt support Memory Stick? I would also add that AGPS is a Qualcomm standard enabled feature but something that hasnt been seen to date with EMP enabled products. This looks like a HTC design, and that means that Qualcomm may have found a back door design win into a major new product from one of their traditional European adversary's. This would be a huge win for Qualcomm as SE's 20% WCDMA market share has generally been seen as closed to their chipset.

If confirmed, this new win would be a real feather in the cap for the chipset team at Qualcomm. They have been laboring under a market cap ceiling of about 35%, and the share price has reflected that. An opening into another 20% of the market would provide a very nice boost to Q's long-term outlook.