updated 04:35 pm EDT, Wed April 23, 2008
Sony Ericsson Q1 2008
Sony Ericsson today posted results for the first quarter of 2008 that suggest a significant downturn for the cellphone producer. The Japanese and Swedish partnership says it shipped 22.3 million cellphones over the period ended in March, or an increase of just two percent over the same quarter in 2007. It also notes that net income dropped by a significant 48 percent year over year to 133 million Euros ($211.4 million). Price margins on its products also dropped slightly to 29.2 percent.
The plunge is attributable to a drop in the popularity of the mid-range and high-end phones that define the company's business in its stronger areas, according to the financial report. The average selling price of a Sony Ericsson phone has been gradually dropping over the course of the year from 134 Euros ($213) to 121 Euros ($192) as the bulk of the company's sales shift towards entry and developing-world phones.
This should change in the second half of the year as products announced at Mobile World Congress in February and in the first part of the year begin to ship. Devices such as the XPERIA X1 touchscreen phone in particular will expand Sony Ericsson's business to a "wider variety" of customers, according to company chief Dick Komiyama. The device is Sony Ericsson's first Windows Mobile phone but is being pitched as a general media device in addition to its business role.
American firms such as Apple and RIM aren't expected to have a major impact on Sony Ericsson's results. The company has enjoyed most of its success in its native Europe, where both the iPhone and BlackBerry have sold in significantly lower numbers than both media phones and smartphones from Sony-Ericsson as well as market leader Nokia. Previous reports have credited this to a lack of 3G Internet access compatible with US networks as well as comparatively high prices.