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Sony Ericsson slumps on gloomy outlook

No love for swanky handsets

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Sony Ericsson issued its second profit warning of 2008 today, advising that it will only break even in Q2 2008.

The company blamed soft demand for mid to high-end phones, as recession concerns in Europe have led customers to opt for cheaper models, and delays in getting new phones to market.

In April analysts said the company's music phones, appropriating Sony's Walkman brand, remained attractive, but that the company was over-exposed in fashion phones. Longer operator contracts have also led to fewer replacement opportunities.

A year ago Sony Ericsson announced profits of €220m. But it's the second poor quarter in a row for the joint venture, which has been one of the successes over the past two years. In March, the company slipped to fifth place - behind LG - in market share, as profits fell by 48 per cent. ®

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