Sony Ericsson swings to €50m loss
Sony Ericsson generated its first quarterly loss since 2009 in 2Q11, as component shortages and a swift collapse in low- and mid-tier device sales took their toll on the firm.
The company reported a €50 million net loss for the quarter, with sales slumping 32% year-on-year to €1.19 billion. It estimates lingering supply chain shortages stemming from an earthquake and tsunami in Japan in March impacted shipments by nearly 1.5 million units during the quarter.
That resulted in a 31% fall in shipments to 7.6 million units, and average selling prices slipped 3% to €156.
Earnings were also impacted by a far faster than expected deterioration in the feature phone market, chief Bert Nordberg told Bloomberg. He said the decline in Western Europe in particular has been “enormously big.”
In another indication of Sony Ericsson's growing reliance on the high end, it revealed that smartphones now account for more than 70% of total sales.
The company is concentrating on Android smartphones, but the recent discovery that Microsoft has bought up the domains microsoft-sony.com and sony-microsoft.com has spawned speculation that Sony Ericsson has decided to develop a WP7 handset.