Ericsson Plans Sales Boost With New Products to Fend Off Nokia
Ericsson Plans Sales Boost With New Products to Fend Off Nokia
Budapest, Aug. 19 (Bloomberg) -- Ericsson AB, the world's third-biggest maker of mobile phones, said it will introduce new products designed to boost stagnant sales and to challenge rival Nokia Oyj.
At the end of last month, Sweden's Ericsson reported a 1 percent rise in sales for the second quarter, sending its shares plummeting. Finland's Nokia, the world's second-largest mobile phone maker behind Motorola Inc. of the U.S., reported a 50 percent increase in sales for the same period. ''The spring was apparently Nokia's, but you can rest assured we're not lying still,'' said Ericsson Chief Executive Sven-Christer Nilsson during a visit to the company's Hungarian subsidiary.
While Nilsson stressed that his company didn't lose market share during the second quarter, he said Ericsson plans to introduce new products to combat Nokia's new breed of sleek, lighter mobile phones. He declined to give details on the timing of new products.
Since reporting second-quarter earnings, the company's stock has fallen 16.4 percent in Stockholm. That includes its biggest one-day loss in five years, 13 percent, after reporting those earnings on July 27.
In the second quarter, Ericsson, Sweden's biggest exporter, posted a rise of 21 percent in profit to 3.38 billion kronor ($429 million) from the same period last year, mainly because of sales growth in China.
Nilsson said he expected sales to remain strong in China even as speculation mounts that the government may be forced to devalue its currency, the yuan. ''This is of great concern to us but we have a lot of domestic activity in China where we develop and produce, so from that point of view we're well-guarded,'' he said.
The company said today it won a $10 million datacom contract in China's Shangdong province.
Ericsson shares rallied 3.2 percent in recent trading to 226.7 kronor while the OMX Index gained 0.3 percent.
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