After releasing their third-quarter (Q3) results, Sony Ericsson’s sales are down to €1.619 billion, a massive drop of 42%.
Handset shipments and revenues are also struggling at Sony Ericsson. Their Q3 results show that just 14.1 million units were shipped, a 2% shortfall on Q2 results and a 45% slump in comparison to the same quarter results from last year.
Sony Ericsson will be most hurt that their sales figures are 42% down to £1.48 billion, 4% lower than Q2. The average selling price of Sony Ericsson units is down from €122 in Q2 to €114 in Q3, but up from last year’s Q3 figures of €109.
The mixture of products and difficult market conditions was blamed for the lower average selling price of handsets.
According to a statement made by Sony Ericsson, improvements were made on gross margin, but dropped annually due to foreign exchange inconsistencies and lower sales. However, improvements in volume and percentage rate were seen in the success of the W995 Walkman phone and a series of cost cutting measures.
President of Sony Ericsson, Dick Komiyama, stated “Our business in the third quarter started to show the effects of our ongoing transformation programme. Having refreshed our brand we are now better positioned to support the launch of new products such as Aino and Satio in Q4 2009. We have cleared channel inventories, and have continued to realign internal resources and improve efficiency. We have also arranged external financing to strengthen the company’s financial position.
“Transforming the business for future growth and returning Sony Ericsson to profitability is the focus of the senior management team and will continue under the new leadership.”
Sony Ericsson set out last year in a bid to reduce their annual operating expenses by €880 million; efforts that are set to continue. The benefits from these cuts are due to be seen towards the end of 2010.
Sir Howard Stringer, chairman, chief executive and president of Sony and member of the Sony Ericsson board, succeeded Carl-Henric Svanberg on 15 October, with Bert Nordberg becoming president at Sony Ericsson in place of Dick Komiyama. Mr Komiyama will remain as an executive advisor until the later stages of 2009.
Experts believe that the world mobile phone handset market for 2009 will shrink by approximately 10% from the 1.19 billion units sold in 2008. Sony Ericsson believe that for unit sales during Q3, they hold approximately five per-cent of the world market.