LONDON—Sony Ericsson Mobile Communications L.P. announced that its earnings for the second quarter—$181 million—nearly doubled its earnings from the year-ago quarter, while revenue increased more than 40 percent and handset shipment volumes increased by 33 percent. The results exceeded financial analysts’ expectations.
The handset vendor said its improved shipments (15.7 million units), revenue ($2.9 billion) and earnings were due to sales of three new Walkman phones—models W300, W700 and W42S—and an updated W810 model, plus its Cybershot K800 model and its two new phones for NTT DoCoMo Inc. in the Japanese market.
However, the company also acknowledged that its average selling price declined sequentially with sales of lower-tier models J100, J220 and J230. The low-end phones broadened the vendor’s portfolio, which in the past has typically been characterized by mid- and high-tier handsets. ASPs generally are declining across the industry.
In contrast to financial analysts’ recent cautionary remarks about softening global demand for handsets—indeed, CIBC World Markets dropped its global, industry-wide shipment estimates from 970 million to 960 million—Sony Ericsson upped its own global estimates to 950 million from its earlier forecast of about 900 million.
Sony Ericsson, which garnered the fifth-largest market share in the world last year, has reversed years of losses with a string of successful quarters. The company pursues only the GSM air interface, having dropped CDMA technology three years ago.
In the United States, which is about 60 percent CDMA behind No. 2 and No. 3 carriers Verizon Wireless and Sprint Nextel Corp., the vendor sells a limited number of phones through Cingular Wireless L.L.C.’s retail stores, and has pursued sales through its own branded outlets and big box retailers. The vendor counts on its Sony Corp. heritage and that company’s well-recognized brand in consumer electronics to reach American consumers.
The company does not break out sales by region, so it remains unclear what proportion of its sales came from the United States.
