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Sony Ericsson Posts Profits Belying Expectations

Posted 19th April 2010.

Belying the Reuter’s poll report comprising inputs from 27 analysts who predicted a mean loss of £ 138 million, the joint venture registered a profit of £ 18 million for the first quarter of 2010.

The turnaround is significant as the end of 2009 was particularly bad for Sony Ericssson mobile phones. What with its flagship handsets Satio and Aino witnessing a host of problems. The company suffered losses to the tune of £ 146 million for the fourth quarter of 2009 and £ 257 million for the first quarter of last year.

Sony Ericsson’s overhaul of its portfolio and concentration on high-end mobile handsets are also seen as reasons behind the turnaround besides the restructuring. Sony Ericsson Xperia X10 and Vivaz have proved to be best selling mobile phones in the high-end market without any technical glitches so far. Thanks to a refurbished Research & Development the joint venture seems set to continue this positive trend.

However, the management needs to continue the good work and concentrate on improving its sales of mobile phones. With 10.8 million handsets sold, the company suffered a drop in sales of 28% last year.

Sony Ericsson is hoping to continue with this upswing in business with its Sony Ericsson Xperia Mini and the Vivaz Pro both of which are scheduled to be launched soon.

There are other new mobile phones in the offing, all of which are not addressed at the high-end of the market.

Sony Ericssion needs to address how it is going to deal with a welter of Android-based phones flooding the market. It also requires to create a nice for its range of smartphones. This it can probably do by aligning its smartphones as closer to its parent Sony’s products as possible.