Sony Ericsson Eyes Profit In 2010 - InformationWeek

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10/20/2009
01:39 PM
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Sony Ericsson Eyes Profit In 2010

The struggling handset maker says its cost-saving measures and high-end new devices will get it back in the black.

The global economic recession has taken its toll on Sony Ericsson, but the world's fifth-largest handset maker expects to return to profitability next year, according to co-president Bert Nordberg.

The company has posted five consecutive quarterly losses, primarily because economic conditions have sapped consumer demand for new handsets. Sony Ericsson has been especially vulnerable because it specializes in mid-tier devices like its Walkman or Cyber-shot lineups, and this segment has been hard hit.

Sony Ericsson posted a loss of about $244 million last quarter, but it was able to beat most analysts' expectations. Nordberg, who will become the sole president of the company when Dick Komiyama retires at the end of the year, said the company's new lineup of devices and cost-cutting measures will help it get back on track.

"If the market continues to stabilize and we are successful with our new products, we will be profitable next year," Nordberg told the Dagens Industri newspaper.

The company has implemented multiple cost-cutting measures this year, including layoffs, and Nordberg said it also plans to implement a program in 2010 that will lead to about $1.3 billion in savings. Sony Ericsson is also preparing its holiday lineup of high-end smartphones to compete against devices like the iPhone, and the Satio, Aino, and Yari will feature strong multimedia and productivity capabilities.

During a conference call Friday, Nordberg indicated the company will soon announce a major shift in its platform strategies for future devices. The company currently has smartphones with Symbian and Windows Mobile, and it has said it will support the Google-backed Android, but analysts are predicting it may drop one of the platforms. Nordberg said the company's strategy will be unveiled over the next two quarters.


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