Sony Ericsson announced today that low consumer demand is having a bad effect on sales and income. It also attributed poor sales to destocking – the practice of retailers to drop stock in response to low consumer spending.
More figures:
Sony Ericsson plans to ship approx. 14 million phones during Q1 2009, with an average selling price of EUR 120. The loss it expects to make on net income before taxes is around EUR 340 – 390 million, with a further loss of EUR 10 – 20 million from “restructuring charges”.
Sony Ericsson will announce full Q1 financial results on April 17.
What we think?
Yikes. Sony Ericsson reported sales of around 97 million phones in 2008. If it was to continue for the rest of 2009 as it has in Q1, then it will only be shipping 56 million handsets total in 2009 – with no estimation given of how many of those it actually expects to sell. The mobile device market isn’t looking as recession proof as people had thought. These kinds of figures might even be enough to make parent company Sony rethink it’s “invest in mobile” strategy. Of course with it’s other parent, Ericsson, doing great business in other sectors, Sony Ericsson could have the financial backing to weather this downturn.
I think its a lot to do with the fact that Sony Ericsson are making a lot of poor devices and give bad customer support.
I bought a sony ericsson phone about a year ago. It was the worst phone I’ve ever had. I couldn’t sell it, I couldn’t give it away – no-one wanted it. I finally smashed it to bits with a sledgehammer which turned out abit expensive as I only had it for three weeks, but it felt sooooo good.
Companies like S.E. deserve to go under