Sony Ericsson Mobile Communications AB has doubled its second-quarter profit thanks to strong sales of its high-end Walkman and camera mobile handsets. It also provided an upbeat assessment of the mobile industry in general after raising its forecast for total industry sales this year.
For the second quarter ended June 30, the handset maker reported a net profit of 143m euros ($182m), compared to a year-ago profit of 75m euros ($95.3m). Sales rose 41% to 2.27bn euros ($2.88bn) from 1.614bn euros ($2.05bn).
London, UK-based Sony Ericsson said shipments of mobile handsets rose by 33% to 15.7 million handsets during the second quarter, compared to 11.8 million a year ago. The markets had only been expecting it to ship 14.3 million during the quarter.
In the past Sony Ericsson had mostly focused on more expensive phones, often achieving what is probably the highest average selling price of any major player in the market. However, in order to tap into the emerging markets it has now started to sell low-end phones as well. This has put it into direct competition with the likes of Nokia Corp and Motorola Inc.
Despite this, it is still enjoying strong demand for its higher-end products. During the quarter it shipped three new Walkman-branded phones, as well as a sports-oriented model, plus a quad-band phone. Another handset that did well for the company was a phone branded with Sony’s Cyber-shot 3.2 megapixel camera phone.
The average selling price slipped on a quarter-by-quarter basis, but was up on a yearly basis. The dip was mostly down to the impact of the company selling low-end phones. Its average selling price per phone slid to around 145 euros ($184) from 150 euros ($190) in the first quarter.
Despite its foray into the lower end of the market, Sony Ericsson has ruled out making monochrome models for the bottom end of the market. Its average ASP per phone is still a lot more than that of its main rival Nokia, which had a ASP of 103 euros ($130) during the first quarter. Nokia is expected to announce its second-quarter earnings on July 20.
Sony Ericsson is a 50:50 joint venture of Sony Corp and Ericsson AB, and was established in October 2001. It employs approximately 6,000 employees worldwide, and while its global management is located in London, R&D is carried out in Sweden, Japan, China, the US, and the UK.
It is the fifth-ranking mobile handset maker, behind Nokia, Motorola, Samsung Electronics, and LG Electronics.
Sony Ericsson also raised it outlook for the mobile industry. It said growth in the handset market had continued to outpace expectations and it raised its forecast for global handset sales this year to more than 950 million units from a previous outlook of above 900 million. It believes that total industry handset sales during the second quarter was about 230 million units.