Sony Ericsson posts profit from the ether
By James • Apr 28th, 2010 • Category: Industry News
- Photo: Sony Ericsson
It’s taken a few weeks to actually settle in, but Sony Ericsson’s last quarter was a profitable one, the first such result in nearly two years thanks partly to aggressive cost cutting and Xperia X10 sales.
Back again, almost
- Photo: Sony Ericsson
The company posted Q1 profits of €21 million (£18 million), a far cry from analysts’ anticipated losses of €128 million (£110 million). What makes these results particularly notable is that the same time last year saw losses totaling €370 million.
Trickery does the job
So, considering those sickening losses, how exactly did Sony come back? Well, firstly, the company slashed its head count, with Sony Ericsson losing 2,000 employees and shutting down four facilities, which is always a viable short-term solution for satisfying Wall Street. In addition, Sony Ericsson managed to up the average price of its mobile phones from €120 the year prior to €134 now. But accompanying that average handset price increase is a sales plummet, where at the same time last year the company moved 14.5 million units, this time round they only managed to move 10.5 million units. In other words, they sold one-third fewer handsets than they did this time last year.
Slite of hand stuff this, not necessarily indicative of a healthy business.
What’s next?
- Photo: Apple
The bulk of this success (and average price increased) comes on the back of the so-so received Xperia X10. While that handset has been riddled with less bugs than Sony’s recent products and would, in another period, be considered a truly remarkable handset, it had the unenviable task of squaring up with HTC and Apple, who are the clear leaders in the smartphone race.
Sony, a shareholder in Sony Ericsson, is rumoured to be working on iPhone and iPad competitors, which, if executed properly given the company’s PSP and Playstation lineage, could be the killer products the Xperia X10 just falls short of.
Tags for this article: iPhone, sony ericsson
