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Sony Ericsson Rings Up Record Sales With New-Age Mobiles

Posted on: Thursday, 19 January 2006, 18:00 CST

By Scott Reid Business Editor

STRONG demand for mobile phones with built-in cameras and music players has helped Sony Ericsson ring up record fourth-quarter numbers.

The world's fifth biggest mobile phone maker expects global handset sales to rise ten per cent in 2006, from an estimated 780 million phones in 2005, with profit margins maintained.

Sony Ericsson president Miles Flint said the firm - which is jointly owned by Sweden's Ericsson and Japan's Sony Corporation - would continue to focus on camera and music models.

He added: "The fourth quarter witnessed very strong sequential market growth, which Sony Ericsson matched, resulting in a record quarter in terms of volume, sales and net income."

Business was buoyed throughout the second half of last year by sales of a high-resolution, two-megapixel camera phone and the Walkman phone, based on Sony's long-running series of portable music players. Mr Flint said the firm would look at extending the Walkman line. New product announcements are likely around the time of a big telecoms conference in Barcelona in March.

Looking further ahead, the Sony Ericsson president sees television on mobile phones becoming popular in two years or so.

However, issues to be solved are how to package TV for phones, such as making edited highlights or shorter versions of popular shows.

The latest results showed quarterly pre-tax profit rising to the equivalent of about GBP 141.6 million, from some GBP 96.4m a year ago. Profits for the year came in at just over GBP 353m - up from around GBP 334m in 2004.

Sony Ericsson's sales rose to 16.1 million handsets in the fourth quarter, up from 12.6 million in the final three months of 2004. The 28 per cent increase was similar to that recorded by Samsung.

The group's final quarter operating profit margin came in at around nine per cent, and Mr Flint said he expected to maintain such levels. Market share was steady at around seven per cent.

Sony Ericsson said it had sold three million Walkman handsets and planned to produce a high-speed 3G version of the phone.

Mr Flint confirmed that his forecast of growth in the worldwide market of ten per cent this year was a preliminary estimate, but the figure was in line with one issued by Samsung last week.

Motorola, whose slimline Razr phone has been a hit with UK consumers, is due to report its fourth-quarter results next week, with market leader Nokia releasing numbers towards the end of the month. Analysts believe Sony Ericsson is set for a steady 2006.

Source: Evening News; Edinburgh (UK)

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