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Sony Ericsson warns of break-even quarter

updated 02:10 pm EDT, Fri June 27, 2008

Sony Ericsson Breaks Even

Sony Ericsson today warned that its income and shipments will have shrunk this quarter over expectations. The cellphone producer now expects its pre-tax income to only "break-even" when reported in mid-July and says it will ship fewer cellphones over the three-month period than it did a year ago, with about 24 million phones shipped worldwide. The company also expects the average selling price to drop further still from the last quarter, dropping from roughly $192 at the start of the year to about $181, earning the company less for each device.

The marketshare reinforces virtually flat growth that was evident in the company's results in the winter and is blamed primarily on "moderating demand" for its mid-range and high-end phones. Nearly all of the company's releases in 2008 have targeted mid-range music and camera functions rather than smartphones. The strategy is believed to have cost the company influence both on the low end, where Nokia often dominates the market, as well as on the high end where Research in Motion's BlackBerry line and Apple's iPhone are often credited for eroding the marketshare of more established phone makers.

Delays for some of the announced phones have also contributed to the shortfall, according to Sony Ericsson.

The handset designer has pinned some of its hopes for recovering its marketshare and boosting its sales prices with the planned late 2008 release of the XPERIA X1, its first Windows Mobile device, first full-spec HSPA device, and first attempt at a full touchscreen media device.

by MacNN Staff



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