Losses hit Nokia and Sony Ericsson in third quarter

Losses hit Nokia and Sony Ericsson in third quarter

Nokia and Sony Ericsson have reported another quarter of consecutive losses, although both issued a more positive outlook for the remainder
of the year.

The companies released their results for the third quarter ended 30 September last week, with Nokia reporting a steep loss of £391m, compared with a profit of £1.3bn one year earlier.

Meanwhile, Sony Ericsson revealed better than expected losses of £150m, compared with a £258m loss in Q2 2009, as the effects of its £802m per year cost-cutting plan started to show.

However, while Nokia said the handset market was going to decline by 7% in 2009, rather than its original forecast of 10%, Sony Ericsson repeated its prediction that the global market would decrease by 10% this year – although it admitted the decline was slowing.

Sony Ericsson’s average selling price rose to £104 from £99 one year earlier, but the number of units shipped fell to 14.1 million from 25.7 million.

Nokia shipped 108.5 million devices during the period, down 8% year on year but up 5% on the previous quarter. The average selling price per unit was £57, down from £66 the previous year.

Strategy Analytics’ head of wireless practice, Neil Mawston, said: ‘Nokia’s revenues and shipments were in line with expectations, but its smartphones were below and its market share is collapsing.’

He added: ‘Sony Ericsson is not going up as fast as expected. Greater competition from RIM, Apple and others, and a lack of a portfolio refresh in Q3 hit the manufacturer. It has a lack of smartphones, touch phones and QWERTY phones.’

Nokia and Sony Ericsson tend to do well in the holiday season, as consumers buy low-cost candybar handsets as presents. Mawston said increased marketing budgets in Q4 should show ‘slight improvement’. He added: ‘The product is key – they are both struggling in high-end phones.’

Written by Mobile Today
Mobile Today


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