Supply chain
Digitimes Insight: Sony Ericsson posts 4 straight profitable quarters
Eric Syu, DIGITIMES Research, Taipei
Wednesday 9 March 2011

Sony Ericsson saw revenues in the fourth quarter of 2010 fall 4.7% sequentially to EUR1.53 billion (US$2.12 billion). Revenues for 2010 came to EUR6.29 billion versus EUR6.79 billion in 2009. Europe, Middle East and Africa (EMEA) are the company's largest revenue source, but the three markets also combined for the largest sales drop off.

To curb operating expenditure, Sony Ericsson let go 4,000 employees amid a corporate restructure. Its operating expenditure in 2010 was down 16.4% compared with 2009.

Sony Ericsson shipped 43.1 million units in 2010. Its Xperia X10 generated strong sales in Europe and Japan, but the rest of the Xperia series failed to achieve the same success.

However, its strategy to target the high-end segment successfully raised ASP to EUR146, up EUR27 from the previous year. The company returned to profitability in the first quarter of 2010 and has remained in the black since.

The future of Sony Ericsson will depend on its strategy for the high-end segment moving forward to maintain profit margin, and whether the company can increase shipments in the US, which is traditionally its weakness, to raise market share.

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