Sony Ericsson Q4 09 a slow recovery

Sony Ericsson on Friday reported continued but slow recovery in the last quarter of 2009. It saw a second straight increase in the number of phones it shipped, pushing 14.6 million phones versus 14.1 in the summer. Losses still affect the company but have largely leveled off at $235.9 million; its pure revenue was also up, to $2.5 billion.

The company blames much of the ongoing loss for costs associated with scaling back its business, but credits the increase to "successful" sales of its touchscreen smartphone flagship, the Satio, as well as a similarly touch-driven conventional phone, the Aino. These and other phones also helped push the average selling prices and profit margins higher than in the past.

In spite of the short-term increases, Sony Ericsson notes that its phone units are still a sharp 40 percent lower than they were a year ago. It admits effectively that the $99 iPhone 3G caught it off-guard as a "faster than anticipated shift" to mid-range touchscreen phones in the past several months left it without a competitor of its own until the fall.

Executives remain hopeful for the future as they anticipate strong results from the Android-based XPERIA X10, which goes on sale soon. However, they caution that the company likely won't truly become profitable until the second half of this year, when most of the cost-trimming benefits should catch up with stronger sales.

A large part of Sony Ericsson's recovery hinges on its return to form in the high end this year. The company has in recent years often focused on lower-cost conventional phones and in many cases saw major product overlaps as different groups would compete against each other. Most of its known portfolio for 2010 so far involves touchscreen smartphones and includes not just the X10 but phones that finally offer features that are rare or unique to Sony Ericsson, such as the Vivaz's 720p video recording. Without a compelling smartphone lineup, Sony Ericsson has watched itself drop to fifth place in overall world market share and fall almost entirely out of contention in smartphone share.

By Electronista Staff