Sony Ericsson’s Q3 Report Leaked – Sales of Camera and Music Phones Soar

Authored by Jay Baage on October 11, 2006 - 8:20am.

Sony Ericsson surprised the market in two ways on Wednesday. First, their Q3 2006 report leaked out one day in advance. Secondly, the results were much better than the market was expecting. Sales of cell phones with high-resolution digital cameras and Walkman music players have exploded in the third quarter. Net income increased by 187% to $374 million year-on-year. Shares in Ericsson rose by 5% on the Stockholm Stock Exchange, while Sony was up by 4% on the NYSE Wednesday afternoon.

Sony Ericsson, a joint venture between Japan's Sony Corp. and Sweden's Ericsson AB, was off to a slow start when the two companies decided to merge their troubled handset units in 2001. Since then, the company has been able to make an impressive comeback. Key to the success has been multimedia cell phones branded with well known Sony brands like Walkman and Cyber-shot.

“The third quarter saw Sony Ericsson reap the success of hit products announced earlier in the year such as the high-end K800 and W810, mid-range K610 and lower-priced W300 and K310. Our strategy of using flagship products to give Sony Ericsson a lead position within a product category, such as imaging with the Cyber-shot megapixel camera phone or music with the Walkman line-up, is creating a halo effect over lower-end models in the same category and encouraging new users to try our phones,” explains Miles Flint, President of Sony Ericsson.

Sony Ericsson forecasts the 2006 global handset market at above 950 million units for the full year, which positions the company as the world’s fourth largest handset maker with a market share of 8 percent, behind Nokia, Samsung and Motorola. On this basis the company believes it has outperformed the growth rate in the market and has made over a 1% point market share gain this quarter.

Related Links:
Sony Ericsson Q3 2006 Highlights
Sony Ericsson’s “M-Buzz” Music Service Breaks New Ground, New Bands
Sweden: MP3 Player Sales Are Flat, Music Cell Phones Are Up
www.sonyericsson.com