Sony Ericsson hit by component shortages, but promises Android dominance

Blaming a lack of components, the CEO of Sony Ericsson, Bert Nordberg, has brushed away a dip in third-quarter revenues and promised an improved future

"There have been some shortages of LCD screens and PCBs on the market. I wouldn't say I had seen a demand decrease," said Nordberg, adding, "I expect higher volumes in Q4, a rebound."

Hinting at its focus for the future, Nordberg said that, having launched its Android-based Xperia models in new markets, such as China and the US, it was the company's "ambition to become the global number one handset provider on the Android platform."

Regardless of this bullishness, the company missed analyst estimates for the quarter by only shipping 10.4 million handsets, against predictions ranging from 10.5 million to 13.9 million.

Pretax profits of €62 million were also well down on industry watchers' estimates of €72 million, but a huge improvement over the loss of €199 million in the same period a year ago.

"It was clearly weaker than expected--8 per cent below my expectations on EBIT (earnings before interest and taxes)--and it is mainly lower volumes that explain it," said Per Lindtorp, analyst at Eric Penser.

However, the company has pulled itself back into the black this year after seven straight quarters of losses. "Sony Ericsson has turned the ship around but will need to maintain a balanced portfolio, improve time to market and increase differentiation if it's to avoid losing its way amidst a swathe of aggressively priced Android devices," said CCS Insight analyst Geoff Blaber.

Reacting to analyst comment, Nordberg said that the company's overall performance was "stabilising" and repeated that the firm aimed to be the number one supplier of Android-powered phones, neglecting to say when this would happen.

What the CEO did emphasise was that the company was working hard to overhaul its product line, and promised to release a continuous flow of new products to counter the growing threat from rivals. "We are very, very aware of what is coming and the competitive situation."

For more on this story:
- read Reuters

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