Sony Ericsson Sees 97% Drop In Q2 Profits - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Mobile
News
7/18/2008
03:41 PM
50%
50%

Sony Ericsson Sees 97% Drop In Q2 Profits

The handset manufacturer sees weak sales in the mid and high-end markets and plans to cut 2,000 jobs.

Sony Ericsson saw its second-quarter earnings drop dramatically from last year, and the company struggled with sales in mature markets.

Net profit dropped to $9.5 million from about $348 million during the same period last year. Sales also slipped to $4.46 billion from about $4.9 billion last year.

Overall, the company posted an operating loss of $3.1million for the quarter, and it shipped 24.4 million units. By comparison, Nokia announced Thursday it had shipped 122 million handsets during the same period.

Sony Ericsson faced increased competition for high-end phones in the United States and Western Europe. Unlike rival Nokia, Sony Ericsson does not have a large line of entry-level phones to offer in emerging markets like China and India.

Because of this, Sony Ericsson finds itself more susceptible to slipping demand for sophisticated handsets in mature markets.

In June, the company warned that slower sales in Western Europe would hurt earnings, and it said Friday that it expected "challenging market conditions" to continue for the rest of the year. This was the second consecutive quarter in which Sony Ericsson had issued a profit warning.

Because of the economic struggles, the company will be cutting 2,000 jobs to save $474 million annually.

"We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth," Sony Ericsson CEO Dick Komiyama said in a statement. "The measures we are taking are aimed at becoming a faster, more agile, and more cost-efficient organization that can continue to create innovative products that excite consumers."

About a year ago, Sony Ericsson was the world's fourth-largest seller of mobile handsets, and it was nipping at Motorola's heels for the third slot. But it now ranks behind Nokia, Samsung, Motorola, and LG Electronics.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
How to Create a Successful AI Program
Jessica Davis, Senior Editor, Enterprise Apps,  10/14/2020
News
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
White Papers
Register for InformationWeek Newsletters
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
Slideshows
Flash Poll