SI: Sony Ericsson Posts Fourth Consecutive Quarterly Loss, Down $299 Million

[Christopher]

Sony Ericsson said Thursday it booked another loss in the second quarter as the global economic crisis continued to weigh on mobile phone sales. The joint venture recorded a loss of 213 million Euro ($299 million), which isn’t as big as the loss last quarter but is still far from the profit of 6 million Euro a year ago. The result was the fourth consecutive quarterly loss for Sony Ericsson. The company shipped 13.8 million units in the quarter, down 43 percent year-on-year. Sales for the period fell by 39 percent to 1.7 billion Euro from 2.8 billion in the second quarter of 2008. Sony Ericsson estimates its market share was over 5 percent in the second quarter compared with about 6 percent in the first quarter. It also reiterated its outlook for the global handset market to fall at a rate of around 10 percent in 2009.

“As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson,” President Dick Komiyama said in a statement. “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.”

During the quarter Sony Ericsson expanded on its strategy of transforming into the Communication Entertainment brand with the announcement of three new mobile phones; Aino, Satio and Yari. These phones integrate communications features with entertainment content and social media applications. In addition, Sony Ericsson announced the expansion of its content delivery platform, PlayNow arena, to include an application store and downloadable movies via PC. This new hardware and software ambition is a radical move from the usual Sony Ericsson we’ve observed for the last several years, and may be the driving factor to resuscitate the company.

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