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Sony Ericsson warns of slower sales  
Wednesday, March 19 2008
by Emmet Ryan


Sony Ericsson has warned that slower growth in
mid-to-high-end mobile phones could hit net sales and income
in the first quarter of 2008. 

The phone manufacturer, which is a joint venture between
Japanese firm Sony and Sweden's Telefon AB LM Ericsson, also
said that a shortage of components for popular mid-priced
phones has also hit sales growth -- described as "modest"
-- in the three-month period. 

 

The company is estimating that 22 million phones will be
shipped during the first quarter of 2008, selling at an
average of EUR120. This adds up to a lower net sales figure
than that of the same period in 2007, with net income before
taxes (NIBT) predicted in the EUR150 million to EUR200
million range. 

 

Increased R&D expenses are also expected to negatively impact
figures. Gross margin is predicted to remain relatively
stable for the quarter, compared with the first quarter of
2007. 

 

Dick Komiyama, president of Sony Ericsson, said in a
statement that the market was "challenging". "This has
been more pronounced in the mid-to-high end replacement
sector of the market in Europe, where Sony Ericsson has
stronger than average market share," he said. 

 

The company has pledged to continue its strategy of reducing
its dependence on the European market, expanding into new
markets, and is planning to become one of the top three
mobile phone makers in the world by 2011.  

 

It currently lags in fourth place behind Nokia, Motorola and
Samsung. To achieve this goal, the company has introduced 15
new handsets this year and brought in the Windows Mobile
platform to its products range, a move that it is hoping will
yield benefits in the second half of 2008.