Sony Ericsson falls into red

July 15, 2011
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Sony Ericsson
STOCKHOLM, July 15 – Mobile phone manufacturer Sony Ericsson posted on Friday a net loss of 50 million euros ($70 million) for the second quarter and said its supply chain had been hit by the disasters in Japan.

In the second quarter last year, the Japanese-Swedish group had made net profit of 12 million euros.

The company sold 7.6 million mobile phones in the quarter, a 31-percent drop from the April-June period in 2010, attributed to an expected fall in the number of non-smartphones it sold and to the earthquake in Japan.

“We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter,” chief executive Bert Nordberg said in a statement, noting the quake had affected the company’s profitability.

In an interview with Dow Jones Newswires, he said the quarter “was lost” and that April had been “a formidable catastrophe.”

“Had it not been for the earthquake and the supply chain constraints we would have shipped 1.5 million more units and we would have been profitable during the second quarter,” Nordberg told Dow Jones Newswires in an interview, adding supply chain problems were “fading away” and that things looked brighter

The group’s revenue fell 32 percent to 1.19 billion euros in the quarter. Smartphones accounted for some 70 percent of its total sales.

Sales of its Xperia phone, which runs the Google Android platform, were up 150 percent from 2010, the company said. It noted its market share in the Android-based segment during the quarter was of 11 percent in volume and 11 percent in value.

Nordberg said that while the market for smartphones grew, the demand for non-smartphones, or so-called feature phones, continued to slump.

The ten-year-old company said it maintained its 2011 forecast for modest industry growth in terms of units in the handset market.

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