Sony Ericsson's revenue and profit fell in first quarter

Sony Ericsson Mobile Communications sales and profit dropped in the first quarter of 2011, the company reported Tuesday

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Sony Ericsson Mobile Communications sales and profit dropped in the first quarter of 2011, the company reported Tuesday.

Sales for the first quarter were €1.14 billion (£1 billion as of 31 March, the last day of the period reported), a decrease of 19 percent year-on-year. Net profit was €11 million, compared to a €21 million profit in the first quarter of 2010.

The company shipped 8.1 million phones during the quarter, a 23 percent decrease year-on-year. Sony Ericsson said feature phone shipments fell and the release of the Xperia arc and the game-centric Play smartphones late in the quarter meant it failed to make up ground with shipments of high-end phones.

Sony Ericsson estimated its smartphone market share for the quarter at about five percent by volume and three percent by value. The company's average selling price per phone during the quarter was €141, a five percent increase year-on-year and also an improvement on the fourth-quarter average of €136 per phone.

However, Sony Ericsson said that prices continue to erode and the increase was a result of product and geographical mix. The company still has a way to go before it can reach the average selling price of €160 it saw in the second quarter of last year. The company is now hoping that the Android-based Xperia Arc and Play will help improve its fortunes during the second quarter of this year. The Arc and Play have been well received by operators and consumers around the world, Sony Ericsson said.

Like many other electronics manufacturers, Sony Ericsson has been affected by the earthquake in Japan. As a result, the Arc and Play won't ship in the numbers the company had previously expected in the second quarter. Volume shipments of the Xperia Neo have also been postponed to the third quarter.

However, the company still plans to introduce more than eight new models this year, Sony Ericsson president Bert Nordberg said during the first-quarter conference call.

In addition, Sony Ericsson has also announced the QWERTY-equipped Xperia Pro. The company has also hinted that its Mini family will be replaced with new models.

The company will also announce a phone equipped with NFC (Near-Field Communications) this year, Nordberg said.

Unlike competing makers of Android-based smartphones, Sony Ericsson has yet to launch a model that has an LTE (Long-Term Evolution) connection. The company will launch LTE smartphones in the future, because "that is a necessity to fill our goals in North America", Nordberg said without providing any details.

To succeed in the smartphone sector, success in the US is an important factor. To increase the company's presence in that part of the world, Sony Ericsson's chief creation officer Rikko Sakaguchi recently moved to Silicon Valley, which means he will be based closer "to strategic partners such as Sony Computer Entertainment, Google and Facebook", according to Nordberg.

Sony Ericsson has shipped close to 12 million Android-based smartphones in the last 12 months.


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