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Handset sales and profits up

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Sony Ericsson Mobile Communications shipped a record amount of mobile handsets and posted an excellent set of results for Q1 2004. It is continuing to gain market share from the likes of Nokia, which is will now be coming under increased scrutiny following its own disappointing performance over the quarter.

For Q1 2004, the Sony and Ericsson-owned mobile phone venture reported net income of €82m, compared with a net loss of €104m in Q1 2003. Pre-tax profit was €97m, double the €37.6m analysts had predicted.

Sony Ericsson made its first profit in Q3 last year, after a string of losses since it was founded in October 2001. This quarter's profit is its third in a row.

Meanwhile, sales grew 66 per cent to €1.33bn from €806m in the first quarter of 2003. The company attributed the turnaround to "favorable market conditions" and last year's restructuring.

The results increase the pressure on Nokia, which last week disappointed investors with an admission that its handset portfolio was lacking medium-priced models and it was losing market share. Last week also saw the world's third-largest mobile phone maker Samsung Electronics post a record Q1 as it took advantage of soaring demand for mobile phones.

Sony Ericsson is the sixth largest mobile phone maker in the world, and during the quarter it shipped a record 8.8m handsets, 63 per cent up on the 5.4m units it shipped in the first quarter of 2003. The figure is especially impressive because it is larger than the 8m units it shipped during the traditionally strong Q4, which benefits from the Christmas period. The company saw particular momentum with its mid and entry-level units.

Looking forward, Sony Ericsson now expects the mobile phone market to expand to 550m handsets in 2004, compared with a previous forecast of 520m.

The Japanese-Swedish handset vendor seems to be gaining market share due to its color screen camera phones, an area where Nokia has been particularly poor.

Source: ComputerWire/Datamonitor

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