Thursday, January 21, 2010

Sony Ericsson Expects Slight Grow in Mobile Device Market in 2010

Sony Ericsson shipped 14.6 million mobile devices in Q4 2009, a sequential increase of 3% and a year-on-year decrease of 40%. Sales for the quarter were EUR 1,750 million, a sequential increase of 8% and a year-on-year decrease of 40%. The sequential increase was driven by market seasonality and successful sales of it "Satio" and "Aino" phones. The year-on-year decrease in both units and sales was mainly due to a downturn in the global handset market and a faster than anticipated shift to touch screen phones in the mid-priced sector of the market. Average Selling Price (ASP) for the quarter rose sequentially by 5% to Euro 120 due to a more favourable product mix.

Gross margin percentage improved sequentially and year-on-year mainly driven by the successful sales of new, higher-margin phones as well as the positive impact of cost reduction activities.

Bert Nordberg, President, Sony Ericsson stated: "Continued cost saving activities and resource realignment are necessary in order to build a leaner, more efficient organisation capable of meeting the demands of the changing competitive landscape. We will continue to focus on returning the company to profitability by establishing Sony Ericsson as the communication entertainment brand based on an exciting portfolio of mid- and high-end products, such as our recently announced Android-based phone, the "XPERIA" X10. 2010 will still be challenging as the full benefit of cost improvements will not impact results until the second half of the year, however we are confident that our business is on the right track."

Sony Ericsson's income before taxes for the quarter, excluding restructuring charges, was a loss of EUR 40 million compared to a loss of EUR 198 million in the previous quarter. The reduced loss was due to the improved gross margin and the benefits of reduced operating expenses. Excluding restructuring charges, Sony Ericsson made a loss for the full year 2009 of Euro 878 million compared with an income of Euro 92 million in 2008. The year-on-year deterioration was mainly attributable to the lower sales.

As of December 31, 2009, Sony Ericsson had a net cash position of Euro 620 million.