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Sony Ericsson blames hit products for Q3 profits surge

'Halo effect'

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Sony Ericsson has announced pre-tax earnings of €433m for its fiscal third quarter, up 187 per cent year-on-year.

This marks a profit increase of €222m compared to the €211m recorded during its last fiscal quarter and a rise of €282m versus the same three-month period a year ago.

Sony Ericsson, which is the world's fourth largest mobile manufacturer, reported sales of its Cyber-shot and Walkman phones had been particularly strong during the quarter.

Sales for the period amounted to €2,913m, representing a year-on-year increase of 42 per cent. Net income was € 298m, compared to €104m last year.

The firm shipped 19.8m mobile phones during the three-month period, a 43 per cent increase compared to the same quarter last year, and approximately double the market growth rate.

"The third quarter saw Sony Ericsson reap the success of hit products announced earlier in the year such as the high-end K800 and W810, mid-range K610 and lower-priced W300 and K310. Our strategy of using flagship products to give Sony Ericsson a lead position within a product category such as imaging with the Cyber-shot megapixel camera phone or music with the Walkman line-up is creating a halo effect over lower-end models in the same category and encouraging new users to try our phones," said Miles Flint, president of Sony Ericsson.

The mobile phone maker thinks the global handset market will total more than 950m units this year. On this basis the company believes it has outperformed the growth rate in the sector and gained more than a 1 percentage point market share this quarter, to reach a global market share of approximately 8 per cent.

The company, a joint venture between Japan's Sony and Sweden's Ericsson, celebrated its fifth anniversary on October 1 2006. It currently employs over 7,000 people worldwide in Europe, Japan, China and America.

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