Sony Ericsson Makes Another Massive Loss

Q2 2008 was a horror show, but that's positively PG rated compared to Q2 2009...

Sony Ericsson has been doing sensible things recently. It has joined the universal charger initiative and agreed to drop Memory Stick Micro for microUSB – though long term improvements don’t help short term woes…

Following up its 97 per cent profit crash this time last year and 358m euro loss in Q1 the monster conglomerate announced it has managed to lose 283m euros in Q2. This breakdown every bit as depressing as you might imagine with the a 213m euro loss in net income comparing to a 6m euro profit in Q2 2008 making that 97 per cent profit fall (and talk in terms of ”profits” at all) look rosy by comparison.

Perhaps more worryingly it reports average handset prices went ”up” six euros to 112 euros and it shipped just 13.8m of them in Q2 2009 compared to 24.4m in the year ago quarter – a horrendous 44 per cent drop off. On the bright side (ish) the 2,000+ jobs it has cut since Q1 are expected to help stabilise the company over time. Sony Ericsson also retains a net cash position of 965m euros despite predicting a 10 per cent contraction in the global handset market this year.

“As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson,” admitted group CEO president Dick Komiyama. “Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost reduction activities. The new product portfolio that integrates communications, entertainment and social media applications should contribute to healthier topline development when shipments start later this year. We remain confident that the actions we are taking will further improve our financial situation and strengthen Sony Ericsson’s competitiveness.”

Komiyama speaks a lot of sense but I’m not convinced given what I’ve seen of hero products the Satio, Aino and Yari that the company has fully learnt the lesson of software over hardware. It needs to soon however since another CEO bleeding heart story this time next year simply won’t wash…

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