Sony Ericsson posts huge loss for 2011

Sony Ericsson posts huge loss for 2011

Sony Ericsson has blamed 'intense competition, price erosion and restructuring charges' after posting a net loss of 247m (£206.1m) this year.

In its accounts for the year ending 31 December 2011, the manufacturer had sales of 5.21bn (£4.35bn), down 17.1% on 2010. Its operating loss was 206m (£171.9m), down considerably from its 2010 full year operating income of 159m (£132.7m).

The manufacturer had a particularly poor fourth quarter last year, posting an operating loss of 227m (£189.4m), compared to operating income of 39m (£32.5m) for Q4 2010. Sales were also down in its fourth quarter to 1.29bn (£1.08bn) in 2011, from 1.53bn (£1.28bn) in 2010. It was hit with 93m (£77.6m) of restructuring charges ahead of Sony gaining full control of Ericsson. However, its net loss for last year was 247m (£206.1m), down from 90m of net income for 2010.

The amount of units shipped was also down sharply. It sent out 34.4 million phones last year, down 20.2% from 2010. Its average selling price increased, reflecting Sony Ericsson's movement away from feature phones to smartphones. The average price of its handset was 152 (£126.83) last year, compared to 146 (£121.81) in 2010.

Sony Ericsson did highlight the positive effects of its switch to smartphones. It said Android-based devices in the fourth quarter were up 65% year on year. It has shipped 28 million Xperia smartphones and said the series will serve as a 'cornerstone' of its lineup in 2012.

Sony Ericsson president and CEO Bert Nordberg [pictured] said: 'Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter. We are aligning our business to drive profitability and to meet customer needs.'

The company said Sony's acquisition of Ericsson's stake in the manufacturer is on track to be completed in late January or early February. Once this takes place, Sony Ericsson will become a wholly-owned subsidiary of Sony. The manufacturer predicted its share of the Android-based phone market in Q4 2011 was 10% in volume and 7% in value. For the full 2011 financial year, it was 10% in both volume and value terms. It estimated 463 million smartphones were shipped last year, up 60% from 2010.

Written by Mobile Today
Mobile Today


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