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Sony Ericsson still making money, to some surprise

€11m in profit during 2011, thanks to Google

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The explosion of Android handsets has kept Sony Ericsson in profit, to the surprise of the markets, which were expecting a significant loss for the first quarter of 2011.

With sales down by 23 per cent – to 8.1 million handsets – and gross revenue from those sales down to €1.1bn – from €1.4bn this time last year – one might be forgiven for thinking that Sony Ericsson was going to lose money. But 60 per cent of those handsets are now high-margin smartphones, and combined with enthusiastic cost-cutting this has handed the mobile giant a profit of €15m (€11m after taxes).

That's not as good as this time last year, and only slightly better than the tail end of 2010, both of which saw high revenues eaten up by restructuring costs and higher taxes, but it's still much better than most were expecting.

A Reuters poll of analysts was expecting losses of around €24m for the first three months of this year, but despite the Japanese earthquake disrupting its supply chain, Sony Ericsson has seen its Xperia handsets (including the PLAY and Neo) sell very well, showing that someone other than Google can make money from Android.

Sony Ericsson has also, finally, stopped restructuring, having apparently cut back enough for the moment, and is now settling into its role providing high-end Android handsets for a decent margin. ®

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