Sony Ericsson suffers under intense competition

Sony Ericsson has reported a net loss of €207 million (US$265 million) for the fourth quarter of 2011, compared to a profit of €8 million a year earlier. Revenues also dropped by 16 per cent, to €1.29 billion.

For the full year, the company posted a loss of €247 million, compared to a profit of €90 million in 2010, and revenues of €5.2 billion, compared to €6.3 billion in 2010.

"Our fourth quarter results reflected intense competition, unfavourable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter," commented Bert Nordberg, president and CEO of Sony Ericsson.

The manufacturer shipped nine million devices in the fourth quarter, a 20 per cent decrease year-on-year and a five per cent decrease compared to last quarter. The year-on-year and sequential declines reflect a significantly lower number of feature phones shipped, partially offset by an increase in smartphone shipments.

Sony Ericsson has shipped 28 million Xperia smartphones to date.

The company estimated that its share of the global Android-based smartphone market was 10 per cent in volume and seven per cent in value during the quarter and 10 per cent in volume and 10 per cent in value for the full year.

Average selling price (ASP) for the quarter was €143, up five per cent year-on-year but down 14 per cent sequentially. The year-on-year increase is due to the shift to smartphones and geographic mix.