Sony Ericsson Q2 device shipments plummet 43pc

16 Jul 2009

The mobile bloodbath continues with Sony Ericsson reporting a 43pc decrease in unit shipments and sales plummeting by 40pc to €1.6bn during its second quarter.

The company attributed the dramatic declines to continued challenging market conditions, particularly in its Latin American markets.

The company reported losses of €283m, an improvement from losses of €370m in the previous first quarter.

The company said that programmes to reduce operating expenses by €880m begun in mid-2008 are continuing apace and the full benefit will be felt by the second half of 2010.

The total restructuring charges for the cost-cutting exercises are expected to come in at around €500m.

Sony Ericsson’s total global workforce has been reduced by 2,350 people so far.

Looking ahead, Sony Ericsson is forecasting the global handset market for 2009 will contract by 10pc from 1.1 billion units in 2008. The company estimates its market share globally at around 5pc in the second quarter.

The company is pinning its hopes for recovery by focusing on its Communication Entertainment brand and, as well as expanding its content delivery platform PlayNow, it has launched three new smartphones –  the Aino, the Satio and the Yari.

“As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson,” said Dick Komiyama (pictured), president, Sony Ericsson.

“Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost-reduction activities. The new product portfolio that integrates communications, entertainment and social-media applications should contribute to healthier top-line development when shipments start later this year.

“We remain confident that the actions we are taking will further improve our financial situation and strengthen Sony Ericsson’s competitiveness,” Komiyama added.

By John Kennedy

Pictured: Dick Komiyama, president, Sony Ericsson