With sluggish revenues, Sony Ericsson’s trajectory levels off

Sony Ericsson Mobile Communications earned $380 million in its most-recent quarter, reflecting the first results of its recent push on low and mid-tier priced devices. The handset manufacturer shipped 25.9 million devices, up 1 million from the previous quarter and an increase of more than 6 million compared with the same period a year ago.
The company said it increased its market share by 1%, giving the firm a 9% share of the global cellphone industry. While it did experience an almost 18% increase in profits from the previous quarter, Sony Ericsson still missed its exceptional year-ago results by almost 11%.
Because the company has pushed further into more affordable devices, its average selling price per device has steadily slid from $209 a year ago to $171 at the quarter’s close.
“Sony Ericsson’s results this morning showed a welcome improvement in margins, but were below expectations on volumes and revenue,” Martin Garner, mobile practice leader at Ovum, wrote in a report.
“After the very strong run of the last few quarters, this is disappointing stuff from Sony Ericsson,” he wrote. “These results should be a blip-Sony Ericsson is still doing well and as the new phones come through should have a stronger portfolio. We continue to expect improvement in Q4 on volumes, revenues and hopefully profits, but our earlier prediction that Sony Ericsson could overtake the troubled Motorola by the end of this year now looks a bit too optimistic.”
Sony Ericsson also announced three new devices and a pair of Bluetooth accessories in conjunction with its earnings. The W910 and K850 phones will be available in stores this month, and the K630 will be in stores later this quarter. The company did not say exactly where in the world the phones will be sold.