Sony Ericsson Mobile Communications L.P. reported a solid fourth quarter, positive news for the Sony Corp.-L.M. Ericsson joint venture as it appears to be coming into its own in the worldwide handset market.
“2004 really was a turning point for Sony Ericsson,” said Martin Garner, research director at consulting firm Ovum. “It started with the company winning Phone of the Year for its T610, continued with it moving into profit, getting a new president, taking a controlling stake in BMC (a Chinese phone manufacturer), launching the media-centric S700 and K700 phones, and ended with the successful launch of its V800 3G phone. It has also launched an entry-level GSM phone into the Asia-Pacific and Chinese markets. This is a healthy set of results with sequential growth of shipment slightly above our estimate of the market growth and average sale price growing slightly to $207.”
For the fourth quarter, Sony Ericsson shipped 12.6 million phones, up from the 8 million it shipped in the same quarter a year ago. The company’s sales rose 40 percent to $2.6 billion, and its net income rose 28 percent to $72 million. However, the company’s net income was down from the $117 million it reported in the third quarter, which the company attributed to marketing and product development expenses, according to reports.
“2004 was a good year for Sony Ericsson as the company established profitability and entered into a growth phase in its development,” said Miles Flint, the company’s president. “The fourth quarter continued a trend of expansion in both volume and sales, showing the company’s ability to effectively compete in this dynamic market. Strong growth in Q4 was led by good uptake of our latest 3G UMTS phone which has laid the groundwork for future expansion of our 3G portfolio.”
For the full year, Sony Ericsson sold 42.3 million phones and scored a net income of $412 million. In 2003, the company reported phone shipments of 27.2 million and a net loss of $112 million.
