Mobile phone maker Sony Ericsson yesterday reported a 48 percent drop in first-quarter net profits, citing slower sales growth in some of its markets.
Last month, shares in the LM Ericsson AB and Sony Corp joint venture plummeted more than 7 percent after it warned that falling growth in the market for mid and high-range handsets would hurt its results in the first quarter.
emerging markets
Despite the quarterly sales drop, Sony Ericsson said it expected the global handset market for this year to grow at a pace of about 10 percent from more than 1.1 billion units last year.
The biggest growth boost is forecast to come from emerging markets, it said.
Net profit for the three-month period that ended March 31 came to 133 million euros (US$212 million), down sharply from 254 million euros in the same quarter last year.
First-quarter sales fell to 2.7 billion euros, compared with 2.9 billion euros in the year-ago period.
shipments
Shipped units, which it had already warned would be lower this quarter, reached 22.3 million, more or less in line with the predicted 22 million units.
Because of the softer sales, the average selling price of high-to-mid end models in its key markets has dropped both sequentially and year-on-year, it said.
The company’s market share was also thought to have reached 8 percent in the first quarter, which it said was down 1 percentage point sequentially.
expansion
Sony Ericsson president Hideki Komiyama said his company’s products had been “well received” in the quarter and that it would continue “to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets.”
“We expect to see a positive effect from these announcements during the second half of 2008,” Komiyama said in a statement.
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