Sony Ericsson Records 25m Euro Loss

Nokia got off lightly...

Yet another example of how ‘immune’ tech firms are from the current economic crisis…?

Yep, contrary to cocky statements made by many IT analysts this year, the impending global recession is indeed taking a nasty bite out of consumer electronics with Sony Ericsson the latest to suffer – and in spectacular style at that.

The monster conglomerate late on Friday reported its Q3 financial results and for the first time turned in a net loss. This wasn’t just dabbling its toes in the red either but an if-you’re-going-to-do-it-do-it-properly €25m loss and it compares to a profit of €267m in Q3 2007.

Just as nasty are figures which show Sony Ericsson shipped ”less” handsets in Q3 2008 (25.7m) verses Q3 2007 (25.9m) in what is supposed to be a growing market, while gross margin was down nearly 50 per cent on the year ago quarter from 31 per cent to 22 per cent. None of which has been helped by the commoditisation of mobile phones with Sony Ericsson’s average handset sales price dropping from €120 in Q3 2007 to €109 in Q3 2008.

“As expected the third quarter has continued to be challenging for Sony Ericsson,” admitted Sony Ericsson president Hideki ((straight face now) Dick) Komiyama. “We are committed to executing our alignment plan as speedily as possible to ensure we have the right size and organisational structure to return the business to healthy profitability.”

So any silver lining to all this? Well, while Sony is currently the fifth largest handset manufacturer in the world behind Nokia, Samsung, LG and – narrowly – Motorola it has been widely speculated it may jump to fourth if Moto’s impending results are as bad as is being predicted…

Fun times ahead.

Press Release

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