Shift to Android driving profitability for Sony Ericsson

Smartphones accounted for over 60 per cent of company’s total handset sales in Q1 but supply chain disruption due to Japan earthquake leads to disappointing results

Sony Ericsson has said its shift to Android-based handsets is driving profitability after revealing smartphones made up over 60 per cent of its total sales during the first three months of this year.

Sales for Q1 were €1.145 million which represented a 19 per cent decrease year-on-year and 25 per cent decrease sequentially.

Sony Ericsson shipped 8.1 million units in the quarter, a 23 per cent decrease compared to Q1 2010 and a 28 per cent decrease from the previous quarter with the average selling price rising five per cent year-on-year and four per cent sequentially to €141.

Gross margin for the quarter was 33 per cent, up two per cent year on year and three per cent sequentially. Income before taxes for the quarter was a profit of €15 million, a decrease of €3 million year on year and €20 million sequentially, with the impact of lower sales offset by higher gross margin percentage and lower operating expenses, Sony Ericsson said.

Net income for the quarter fell €10 million compared to the same period a year ago to €11 million, with an increase of €3 million sequentially.

Sony Ericsson president and chief executive Bert Nordberg said: “Sony Ericsson’s profitability continues as we accelerate our shift towards an Android-based smartphone portfolio, with smartphones comprising over 60 per cent of our total sales during the quarter.

“However, the Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain. We will continue to evaluate the situation.”

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