Sony Ericsson Issues Second Profits Warning

Demand flattening out, though it's a long way from being the next Palm or Motorola.

Sony Ericsson has been here before but now things are getting even worse…

Following on from some truly horrendous Q1 results where profits crashed 48 per cent to just €133m, the handset giant has announced a profits warning (it’s second of the year) and admitted it may struggle just to break even during Q2.

Blaming “continued market challenges” which it explains as flattening demand for mid to high-end handsets (particularly in Europe) combined with shipment delays – both seen partly as results of the economic downturn. Consequently, SE claims it will ship approximately 24m handsets in Q2 with an average selling price of €115 each, Q1 saw it sell 22.3m for an average of €121 apiece.

Completing a miserable picture for the company is news it has also slipped to fifth place in the mobile marketplace. Nokia, Samsung, Motorola and now LG sit above it.

Of course things could be worse, Motorola has forgotten what profitability is and the R&D of Sony Ericsson is still producing cutting edge devices like the Xperia X1 (above). On the other hand, whether enough people will be able/willing to splash out on it however is another matter entirely…

via Financial Times

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