Sony Ericsson back in the black thanks to Android but disappoints once more

The mobile phone maker Sony Ericsson said yesterday that focusing on the Google Android operating system had catapulted it back into profit, ending a two-year losing streak.

However, fourth-quarter results at the company – which is changing its product mix to sell more high-end smartphones – came in below City expectations. It reported disappointing growth in sales volumes and a fall in average selling prices, compared with the previous three months. Sony Ericsson said its net income for the year to 31 December came in at €90m (£76m), partly driven by an extensive cost-cutting programme, compared with a loss of €836m in 2009 and €73m the year before.

The company's sales plummeted during the credit crunch, forcing it to restructure its cost base to combat the threat from rivals Apple, Research in Motion and HTC. Bert Nordberg, the chief executive of Sony Ericsson, said: "2010 was a turnaround year for Sony Ericsson. Our four consecutive quarters of profit reflect the success of our shift towards an Android-based smartphone portfolio."

In 2010, Sony Ericsson completed its "company-wide transformation programme", which improved its cost-to-sales ratio, slashed its global workforce by 4,000 and consolidated its facilities worldwide. These measures reduced its annual expenses by more than €880m. Total sales at Sony Ericsson, a joint venture between LM Ericsson and Sony, fell to €6.29bn in 2010 from €6.79bn the previous year. The company's net income of €8m in the fourth quarter marked a sharp improvement on a loss of €167m last year. But Helena Nordman-Knutson, an analyst at Ohman Fondkommission, said its final quarter performance was significantly below expectations.

The volume of units shipped in the quarter fell by 23 per cent on last year. And Sony Ericsson admitted the sequential increase of 8 per cent was "constrained by a lack of new product launches" in the final quarter.

This also affected the company's average selling prices, which tumbled 12 per cent on the previous quarter, although it rose 13 per cent to €136m on the previous year. Sony Ericsson said sales volumes in the global handset market "increased slightly" to almost 1.2 billion in 2010.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links