PC Performance Clinic Blog

Sony Ericsson has recently issued the profit warning sheet which said that for the first quarter of 2009 they would sell nearly 14 million cell phones so has to make up for their just 8.3 million phones that were sold from the same last year period. Sony Ericsson also expects to post the s€340 million to a raised €390 million annual loss over taxes which exclude €10 million to around €20 million over the restructuring charges. The company would soon announce their first quarter results by the 17th of April. However for the first quarter of the previous year the company had sold around 22.3 million cell phones and had made around €133 million net profit.

According to the company’s statement their drop in sales had also increased their net losses which are the result of weak consumer demand and the slowing down of retail orders for new stock. During the year 2008, Sony Ericsson had announced plans to cut down the costs by nearly €300 million annually which had put down nearly 2,000 people. According to Carolina Milanesi the Gartner analysts, this news however does not come as a surprise. She said that the cell phone market has already picked up very little during the first quarter but not in the markets where Sony Ericsson is dependent. According to Carolina Milanesi , the sales of the company have taken a fall down turn because of the economic downturn, but this is obvious that their portfolio does not stand out any further.

Melanesi said that camera and music player have also become more extensive among the portfolio of their competitors which place more pressure on Sony Ericsson. She further added that Sony Ericsson still does not have a pure touch screen phone launched in the market. In the month of February 2009, the company had announced their Idou which is a pure touch screen mobile, designed with Xenon flash, 12.1 MP camera and an impressive 3.5 inch widescreen display. However it would not ship until the second quarter of 2009.

Additionally this profit warning also comes because Sony Ericsson is supposedly looking to exit the joint business with Sony think that Sony is perhaps overtaking them. However a spokesperson said that Sony Ericsson is still entirely committed to the joint business while other spokesperson said that the company does not to comment on their reports. On this Milanessi said that it will basically make sense for Sony to take over the joint business as Sony count integrate more if their technologies into other mobile devices. However Sony has also complained about the joint business with Sony Ericsson that the yare not making money and so it would only dampen the enthusiasm of the company to take over them.