Sony Ericsson Reports Q4 and CY 2011 ...
• Sony Ericsson Fourth Quarter and Full Year 2011 Results (Earnings Press release)
hugin.info
• Sony Ericsson Q4 and full year 2011 Business Update (Presentation)
ericsson.com
Sony Ericsson estimates that its share of the global Android-based smartphone market was 10% in volume and 7% in value during the quarter and 10% in volume and 10% in value for the full year. Sony Ericsson estimates that the global smartphone market for the full year 2011 increased by 60% in volume to 463 million units. Sony Ericsson estimates strong growth in the smartphone market in 2012. In October 2011 Sony Corporation (“Sony”) and Telefonaktiebolaget LM Ericsson (“Ericsson”) announced that Sony will acquire Ericsson?s stake in Sony Ericsson and that Sony Ericsson will become a wholly-owned subsidiary of Sony. The transaction is expected to close in late January to February, subject to customary closing conditions, including regulatory approvals.
There is an interesting perspective on Android in the first article below ...
"I think, the fact that we are now also seeing HTC beginning to struggle indicates that all is not well for a large proportion of Android manufacturers. It is very, very difficult for them to make money. ... The companies that make money on Android hardware are HTC, despite its current struggles, Samsung and, perversely, Microsoft, from its Android-related licensing deals. ... It is very clear that Samsung is nervous about its reliance on Android, and is looking to reduce it." - Geoff Blaber, CCS Insight -
>> Android Camp's Troubles Show in Sony Ericsson's Struggles
Mikael Ricknäs
IDG News
January 19, 2012
pcworld.com
Sony Ericsson reported a net loss and a fall in revenue for the fourth quarter, further highlighting the struggles of many vendors who rely on Google's Android to power its smartphones.
Sales for the quarter were approximately €1.3 billion (US$1.7 billion), down 16 percent year-on-year. The net loss amounted to €207 million, compared to a profit of €8 million in the same quarter of the previous year, the company said.
Sony Ericsson shipped 9 million phones, a 20 percent decrease year-on-year, citing fierce competition and price erosion as reasons for the abysmal result.
Sony Ericsson isn't the only company that blames increased competition for its struggles. HTC and Motorola Mobility have both to pointed to intense competition as a reason why their respective fourth quarters were difficult. The exception is Samsung, which has seen success with its Galaxy family of smartphones.
Sony Ericsson and Motorola have been fluctuating between losses and profits for about two years, according to Geoff Blaber, analyst at CCS Insight.
"I think, the fact that we are now also seeing HTC beginning to struggle indicates that all is not well for a large proportion of Android manufacturers. It is very, very difficult for them to make money," said Blaber.
The companies that make money on Android hardware are HTC, despite its current struggles, Samsung and, perversely, Microsoft, from its Android-related licensing deals, Blaber said.
Samsung became the biggest smartphone vendor by volume in the third quarter last year, according to Strategy Analytics.
There are several reasons for Samsung's success. The fact that it makes many smartphone components itself gives the company control and cost advantages, according to Blaber. It has also had a good relationship with Google, and received early access to new versions of Android, he said.
"It is classic Samsung, as well. It has executed phenomenally well on hardware, particularly at the top-end, and created a very strong franchise in the Galaxy family," said Blaber.
As the company sells more Android-based smartphones, Google becomes more reliant on Samsung. That will help Samsung get even better support, according to Blaber.
But Samsung is still hedging its bets. Last year, it joined Intel on the development of Tizen, a new open source operating system, announcing the move shortly after Google's plan to acquire Motorola became public. This week, reports circulated that it is considering merging Tizen with its own platform, Bada.
"It is very clear that Samsung is nervous about its reliance on Android, and is looking to reduce it," Blaber said.
Apple's continuing success is of course also hurting many vendors in the Android camp. The company will report on its results for the last quarter of 2011 next week, and is expected to sell about 30 million iPhones, which would be a new record.
At the end of October, Sony announced it will acquire Ericsson's 50 percent share in their Sony Ericsson mobile phone joint venture, turning the company into a subsidiary. The transaction is expected to close in late January to February, Sony Ericsson said. ###
>> Sony Ericsson Sees Loss
Sven Grundberg and Jens Hansegard
The Wall Street Journal (Stockholm)
January 19, 2012
online.wsj.com
Mobile handset maker Sony Ericsson Thursday surprised the market with a €207 million ($266.3 million) loss due to increased competition and headwinds in Europe in the three months to Dec. 31.
The loss came in the company's last quarter as a joint venture before electronics giant Sony Corp takes full ownership. It compares with a €8 million profit in the same quarter last year and against market expectations for a €31 million profit. Sales came in at €1.29 billion, down from €1.53 billion in the same period of the previous year.
"Our fourth-quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter," Chief Executive Bert Nordberg said in a statement.
The company faced restructuring charges for the fourth quarter of €93 million, due to a restructuring program initiated in December that included work force reductions. The dismal economic landscape in Europe also took a toll, with sales in the Europe, Middle East and Africa region down 28% year-to-year to €517 million, as consumer sentiment slumped.
Outgoing joint venture partner Ericsson said the large quarterly loss will strike 1.1 billion Swedish krona ($160.7 million) from its fourth-quarter operating income. Sony said it will take a ¥33 billion ($429.5 million) special loss on its holding.
Sony Ericsson is the first major handset maker reporting fourth-quarter earnings but some of its larger rivals provided updated earnings guidance earlier this month. Samsung Electronics said it is expecting record-high quarterly earnings in the fourth quarter, boosted by brisk smartphone sales, while HTC and Motorola Mobility Holdings warned they will be reporting weaker-than-expected sales due to heightened competition on the market
Sony Ericsson shipped 9 million handsets during the quarter, down 20% year-to-year and 5% lower than the previous quarter. "The year-on-year and sequential declines reflect a significantly lower number of feature phones shipped, partially offset by an increase in smartphone shipments," the company said.
The company has previously said that it intends to stop selling cheaper, lower performance feature phones by mid-2012. The increased share of high-margin smartphones in Sony Ericsson's sales mix raised the average price of the handsets it sold to €143 in the fourth quarter, from €136 in the same quarter last year.
Alandsbanken analyst Lars Soderfjell expressed strong disappointment at the results. "One would have hoped for a better finale than this," he said. "One wonders how it could get this bad? It seems a case of 'my dog ate my homework'."
However, shares in telecom network equipment maker Ericsson were up after the result, recently trading 1.9% higher at 68.25 krona, with markets viewing the result of a joint venture that will soon be wound up as unimportant.
"[The quarterly result] makes me even more convinced that the deal to sell Sony Ericsson was a very compelling for Ericsson," Cheuvreux analyst Odon de Laporte said.
Last year was a tough one for Sony Ericsson. It was hard hit by its exposure to Japanese component suppliers who were forced to halt production after the earthquake and tsunami that struck Japan in March. Additionally, the company has continued to lose market share under intense competition from Apple's popular iPhone and high-performance Android smart phones from the likes of Samsung and HTC.
The unlisted Swedish-Japanese joint-venture is due to be taken over by Sony next month, ending an 11-year tie-up with Ericsson. Sony's €1.05 billion buyout, announced in October, will give the Japanese firm valuable mobile assets to integrate with its array of consumer electronics devices such as laptops and tablets, and with its music and video content. ###
- Eric - |
