Sony Ericsson Loses Money, Tough Competition To Blame
The World of smartphones is quite a competitive and tough market to do well in. One company in particularly that struggled during the fourth quarter of 2011 was Sony Ericsson, the ninth largest maker of cell phones.
Companies such as Apple and Samsung did very well and with the iPhone creeping up on Android in terms of OS market share, some would say fantastically well which they would be right.
“Sony Ericsson reported a fourth-quarter pretax loss of 247 million euros ($317 million), compared with a forecast for a 42 million profit in a Reuters poll in which estimates ranged from a 130 million loss to a 94 million profit.”
“For the full year, Sony Ericsson slipped to a 243 million euro loss, forcing Ericsson to take a 1.1 billion crowns ($160 million) hit to its operating income in the fourth quarter. The venture shipped 9 million units in the fourth quarter, down 20 percent on last year, with smartphone deliveries failing to compensate for falling feature phone sales.”
Even with sales usually jumping up in the fourth quarter, the company saw a decline of 16% compared to the same time the year prior.
“Volume and profitability at Sony Ericsson are both considerably worse than expected, illustrating not only the intense competitive environment, but the huge challenge facing Sony as it embraces the mobile business,” Geoff Blaber at CCS Insight said on Thursday.”
“Key to success going forward will be Sony’s ability to gain traction in the smartphone market, which Sony Ericsson estimated grew 60 percent to 463 million units in 2011.”
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