Sony Ericsson reports a €250m loss

MOBILE PHONE joint venture Sony Ericsson has reported a €250m loss last year, after a worse than expected fourth quarter. The firm, which is being taken over by Sony, reported its results for the quarter ended 30 December on Thursday.

For the full year, Sony Ericsson slipped to a €243m loss. This forced joint venture parent Ericsson to say it would take a $160 million hit to its operating income in the fourth quarter.

Sony Ericsson said that fourth quarter sales were negatively impacted by "macroeconomic challenges in advanced economies contributing to weaker holiday sales, and certain component shortages from the flooding in Thailand in late October and early November 2011".

In the smartphone market Sony Ericsson estimated shipments grew 60 per cent to 34.4 million units in 2011.

Sony Ericsson said it shipped nine million units in the fourth quarter, down 20 per cent on last year, due to falling feature phone sales, which still make up 20 percent of Sony Ericsson's sales volumes. Sony Ericsson has shipped 28 million Xperia smartphones to date and the devices made up 80 per cent of the company's sales in the fourth quarter of 2011.

Its average selling price (ASP) for the quarter was €143, up five per cent year on year but down 14 percent sequentially. Sony Ericsson estimates that its share of the global Android-based smartphone market was 10 per cent in volume and seven per cent in value during the quarter.

Fourth quarter sales fell 16 percent year on year and 19 per cent quarter on quarter.

Sony Ericsson CEO Bert Nordberg said, "Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter.

"We are aligning our business to drive profitability and to meet customer needs. In spite of these challenges, throughout 2011 we've shifted our business from feature phones to smartphones, and our Android-based smartphone sales in the quarter increased by 65 [per cent] year-on-year. The Xperia portfolio, including the recently announced Xperia NXT series, will serve as a cornerstone of our smartphone lineup in 2012."

Last year Japanese firm Sony announced that will take over the struggling joint venture, a transition that it is expected to complete by early February. µ