Sony Ericsson's slow-down due to high-end focus

Sony Ericsson (SE) has predicted a slide in its Q1 sales as competing manufacturers enter the mid- to high-end handset sector, and European consumers--where SE has above average market share, have called a halt to cell phone upgrades.

The company now forecasts that handset shipments will amount to around 22 million, while Q1 net income before tax is projected to reach €150-200 million, compared to €362 million a year ago. R&D costs are also predicted to be higher as SE attempts to broaden its product range to support an entry into new markets.

According to Ovum, the U.K.-based market research firm, this profits warning is bad news for parent companies Sony and Ericsson since SE's profit contribution is now material for both.

For more on this story:
- read Mobile News and Ovum

Related story:
Sony Ericsson global marketing chief quits

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