updated 11:00 am EDT, Fri April 17, 2009
Sony Ericsson Q1 2009
Sony Ericsson today reported first quarter results that warned of a steep drop in phone shipments and increasing losses that will push the company to further scale back its operations. The company says it shipped only 14.5 million phones between January and March, or about 35 percent less than it did during the same span a year ago and 40 percent less than the holiday season in late 2008. The sharp decline has also widened Sony Ericsson's net losses to the equivalent of $382.4 million (versus a $173.6 million income for early 2008).
In the wake of the news, Sony Ericsson also says it will cut an addition 2,000 jobs beyond the 2,000 already announced last year.
The company blames the economic crash for some of its decrease and estimates that the market will shrink at least 10 percent in 2009, with slightly under 1.2 billion phones shipping in the year. However, it also estimates that its market share will have dropped a full two points to 6 percent and will likely cede ground to LG, Samsung and potentially Motorola. Sony Ericsson has given up significant ground in the high-end market and notes that its average phone selling price dropped slightly to about $156, indicating that most of its phone sales continue to involve mid-range or budget models.
The firm isn't expected to see a significant turnaround until the second half of the year, when the 12-megapixel Idou ships using Symbian. In a Reuters interview, company chief Hideki Komiayama says there is still "some time to go" before the company's planned Android-based phones come about and improve the company's smartphone position. Most of the delay is assigned to wanting to customize the experience versus other manufacturers, many of whom have been using stock versions of Android.