Sony Ericsson makes loss of £206m in 2011

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Handset manufacturer also makes loss of £173 million in Q4 2011, which it says was due to intense competition, price erosion and restructuring charges

Sony Ericsson made a loss of £206 million in 2011 compared to a profit of £75 million in the previous year. It also posted a loss of £173 million in Q4 2011 after breaking even in Q3.

Sales for the quarter were £1.1 billion, which was down 16 per cent year-on-year and 19 per cent compared to the previous quarter.

Sony Ericsson said the year-on-year fall reflects the decrease of feature phone sales which was only partially offset by an increase in smartphone sales.

It added the sequential decline was due to geographical and product mix, resulting in lower sales of both smartphones and feature phones.

The handset manufacturer shipped nine million units during the quarter, which represented a 20 per cent decrease year-on-year and a five per cent decrease compared to Q3.

Sony Ericsson said the declines reflect a significantly lower number of feature phones shipped, partially offset by an increase in smartphone shipments.

Sony Ericsson has shipped 28 million of its Xperia smartphones to date, which accounted for approximately 80 per cent of total sales in the quarter. There was a 65 per cent year-on-year increase in Android-based Xperia smartphone quarterly sales.

Average selling price for Q4 was £119, up five per cent compared to Q4 2010 but down 14 per cent sequentially.

The company said the year-on-year increase is due to the shift to smartphones and geographical mix, while the sequential decrease is attributed to geographic and product mix, including declining prices of products launched earlier in the year, and the absence of new products introduced in the fourth quarter.

Sony Ericsson president and CEO Bert Nordberg (pictured) said: “Our fourth quarter results reflected intense competition, unfavourable macroeconomic conditions and the effects of the 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.”

The Sony Xperia X is due to launch in the UK in March and will be the first smartphone from the company following the announcement in October that it was purchasing Ericsson for £869 million.

Sony Ericsson said it expected the transaction to be completed late January to February, subject to customary closing conditions, including regulatory approvals.

 

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