updated 08:00 am EDT, Fri October 15, 2010
Sony Ericsson Q3 2010 makes profit on smartphones
Sony Ericsson today said it had swung to a profit even as its market share continued to drop. The company shipped just 10.4 million phones, a drop from 14.1 million a year earlier, but posted a profit of about $69 million where it had lost $231 million 12 months ago. It came as Sony Ericsson revealed that more than half of its phone sales were of smartphones like the Xperia X10.
The Swedish phone designer was making nearly twice as much of a gross margin at 30 percent compared to last year, when many of its devices were basic and media phones that were struggling against either very similar alternatives from Nokia or more advanced smartphones from Apple, RIM and Google's Android partners. A major coup came this summer when Sony Ericsson shipped the X10 to the US and also began selling Android devices in China. Previously, smartphone sales in these countries were usually limited to poor-selling Windows Mobile phones.
Sony Ericsson's unit decline could see Apple overtake it in absolute market share for the first time. iPhones have outsold Sony Ericsson's smartphone mix for some time but, due to continued sellouts of the iPhone 4, could sell more phones outright.
To bounce back, Sony Ericsson has said it ultimately hopes to be the top-selling Android platform and may have special, high-end phones to match. CEO Bert Nordberg has hinted at a "big surprise" coming in the near future that may be an Android-based PlayStation phone. Rumors have put it launching early next year with Android 3.0, a dedicated section of the Android Market and a slider design that would have PSP Go-style physical controls.