Sony Ericsson Q1
* Sales surged 66 percent to 1.34 billion euros from 806 million euros.
* Unit shipments surged 63 percent to a record 8.8 million phones as it sold more low-priced handsets.
* Net income was 82 million euros ($98.7 million), compared with a loss of 104 million euros a year earlier.
* The average selling price rose 2 percent to 152 euros from a year earlier, while dropping from 180 euros in the previous three months.
* Nokia's average handset sold for 114 euros in the first quarter.
* Sony Ericsson is luring users with its color-screen camera phones at the expense of Nokia, the market leader for the past six years. Only 6 percent of Nokia phones sold last year had a camera, compared with 30 percent for London-based Sony Ericsson and 18 percent for Samsung Electronics Co., according to Strategy Analytics.
* Nokia is fighting back. It today unveiled the 6610i, which has a camera and lets users surf the Internet and read and send e- mails. The phone will start selling for an unsubsidized 250 euros, the company said in an e-mailed release. Its predecessor, the 6610, has no camera and went on sale for 500 euros unsubsidized in 2002.
Sony Ericsson Posts Third Quarterly Profit in a Row, Led by Camera Phones
Sony Ericsson Posts 1st-Quarter Profit as Sales Jump
Bloomberg
April 19, 2004
quote.bloomberg.com 
Sony Ericsson Mobile Communications Ltd., the mobile-phone venture owned by Sony Corp. and Ericsson AB, posted a third straight quarterly profit, taking market share from Nokia Oyj by selling more camera phones.
First-quarter net income at Sony Ericsson, the sixth-biggest mobile-phone maker, was 82 million euros ($98.7 million), compared with a loss of 104 million euros a year earlier, it said in a Hugin statement. Sales surged 66 percent to 1.34 billion euros from 806 million euros.
Sony Ericsson is luring users with its color-screen camera phones at the expense of Nokia, the market leader for the past six years. Only 6 percent of Nokia phones sold last year had a camera, compared with 30 percent for London-based Sony Ericsson and 18 percent for Samsung Electronics Co., according to Boston- based market researcher Strategy Analytics.
``Sony Ericsson is showing recovery, but all handset makers are seeing improvement while the top maker stumbled,'' said Tokyo- based Makoto Sakuma at Asahi Life Asset Management Co., which oversees $3.8 billion, including Sony shares.
Sales were expected to reach 1.3 billion euros, according to analysts surveyed by SME Direkt. Pretax profit was 97 million euros, compared with the 37.6 million euros analysts predicted.
Raised Target
Sony Ericsson joined rivals such as Nokia in raising its market outlook. Industry sales of mobile phones will grow more than 17 percent to at least 550 million units this year, up from a previous estimate of about 520 million, Sony Ericsson said.
Sony Ericsson's unit shipments surged 63 percent to a record 8.8 million phones in the quarter as it sold more low-priced handsets. The company's market share rose to 7 percent from 6 percent in last year's fourth quarter, Sony spokeswoman Hiroko Saito said in an interview.
``Our plan is to increase market share steadily over the year,'' President Katsumi Ihara said in a telephone interview. ``This has to be realized together with profit improvement.'' He declined to give a target for Sony Ericsson's market share.
Handset Prices
The average selling price rose 2 percent to 152 euros from a year earlier, while dropping from 180 euros in the previous three months. Average selling prices were calculated by dividing revenue by the number of phones shipped. The selling prices may decline this quarter from the previous three months as low-cost models such as the T23 make up for a growing part of sales, Chief Financial Officer John-Peter Leesi said in an interview.
Nokia's average handset sold for 114 euros in the first quarter, according to J.P. Morgan Chase & Co.
After losing money and market share on handsets for years, Ericsson in October 2001 combined its mobile-phone business with that of Sony, tapping the Japanese company's consumer electronics experience, with hits such as the Vaio computer series and PlayStation video-game consoles. Sony, unable to break into the handset market, needed Ericsson's technology.
Sony Ericsson initially continued the slide as it struggled with logistics problems, losing 879 million euros in the first 21 months of its existence. The venture's fortunes began to turn last year when cameras -- an area in which it benefited from Sony's expertise -- became a popular feature among consumers.
The black-and-white T610, which has a color screen and camera, in February was named 2003's best phone that uses the global system for mobile communication standard by the GSM Association, an industry group.
The Competition
Ihara, who's led Sony Ericsson since it was founded in October 2001, has said he plans to focus on making phones with better cameras to grab market share. Sony Ericsson this quarter will begin selling the K700 phone, which records and plays video clips and stores about 50 pictures taken with its camera.
The S700 phone, which has an 1.3 megapixel camera allowing for higher-resolution photos, will follow later this year.
Nokia, which has held the No. 1 position since 1998, on Friday said first-quarter sales fell as competitors took market share. Nokia may not be able to reverse the slide until as late as the fourth quarter, Chief Executive Jorma Ollila said. Ihara declined to comment on Nokia's market share slide.
Window of Opportunity
Sony Ericsson, Samsung, Motorola Inc. and Siemens AG have an opportunity to exploit Nokia's weakness in the coming two quarters, analysts including Ben Wood at researcher Gartner Inc. have said.
Samsung, which this month passed Nokia in market value, on Friday said first-quarter profit almost tripled to a record 3.1 trillion won ($2.7 billion), helped by mobile-phone sales. The company said it will sell more phones this year than the 65 million it forecast in January.
Sony Ericsson this year began selling the T630 handset, a follow-up to the T610 phone with an improved camera and screen. The T630 has been in short supply in stores, limiting Sony Ericsson's prospects of gaining market share, Wood said.
The company has had ``great delivery difficulties,'' Anders Hedh, head of marketing at Dialect AB, which operates about 100 handset stores in Sweden, said in an e-mail on Wednesday. Because of that, phones from Nokia topped Dialect's sales list in March, he said.
Ihara said component supply is ``tight,'' hampering phone production. Even so, Sony Ericsson has fulfilled supply commitments to customers, he said.
Nokia is fighting back. It today unveiled the 6610i, which has a camera and lets users surf the Internet and read and send e- mails. The phone will start selling for an unsubsidized 250 euros, the company said in an e-mailed release. Its predecessor, the 6610, has no camera and went on sale for 500 euros unsubsidized in 2002. <<
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