Sony Ericsson results disappoint, says analyst

11 Oct 2007

Although shipments were up 4pc on the quarter from 24.9 million to 25.9 million devices, the average sales price of Sony Ericsson devices fell 4pc from €125 to €120 resulting in a flat quarter for the company.

On a year-on-year comparison basis, units shipped were up 31pc on last year. Sales for the quarter were €3.1bn and the company reported a net income of €267m for the third quarter.

Sales were driven by low and mid-tier models and the company’s performance was bolstered by an improvement in margins.

“The quarter has seen Sony Ericsson continue to generate significant year-on-year volume growth with a portfolio of products spread across the widest variety of price points in the company’s history,” said Miles Flint, president of Sony Ericsson.

“Low and mid-tier priced models such as the W200 Walkman phone and simple ‘talk and text’ range of phones have been key volume drivers during the quarter, while the high-spec P1 smartphone and W580 slider Walkman phone have been well received and strengthen the portfolio at the higher-end,” said Flint.

“We are confident that the remainder of the year will see us further capitalize on this new broader portfolio with flagship walkman phone models such as the W910 and W960 plus the much-anticipated 5 mega-pixel Cyber-shot K850 camera phone launching in time for the holiday season.”

Analyst firm Ovum says that Sony Ericsson’s results were below expectations on volumes and revenue.

“After the very strong run of the last few quarters, this is disappointing stuff from Sony Ericsson,” said mobile practice leader at Ovum, Martin Garner.

“These results should be a blip — Sony Ericsson is still doing well and as the new phones come through should have a stronger portfolio.

“We continue to expect improvement in Q4 on volumes, revenues and hopefully profits but our earlier prediction that Sony Ericsson could overtake the troubled Motorola by the end of this year now looks a bit too optimistic,” Garner added.

By John Kennedy