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Tokyo/Stockholm (pte018/15.04.2005/12:00) - Mobile phone manufacturer Sony Ericsson http://www.sonyericsson.com has today announced that sale, profits and prices all fell in the first quarter when consumers favoured cheaper phones and the market struggled to shift inventories built up before Christmas. As the company reports in a press release on its website, pre-tax profits at the Japanese-Swedish Joint Venture fell by 28 per cent to 70 million euros in the three months to March 31, with sales down four per cent compared with a year earlier at around 1.3 billion euros.
"The exciting and innovative products we announced during the first quarter have been well received and will give us a stronger portfolio during the rest of the year," said Miles Flint, president of Sony Ericsson. "We believe there is a good growth potential in the market, both from new subscribers and from consumers who are upgrading their mobile phones, so the increased investments we are making now will build our brand and strengthen our product portfolio so we can continue to excite consumers," he added.
According to the company, market growth was moderate during the quarter, and due to a more normal seasonality the market declined sequentially. The Western European market declined slightly and witnessed a shift to pre-paid products, which general inventory build up in the sale channels during Q4 spilling over into the first quarter created a more competitive market environment than a year ago, it said. These general market conditions partly caused the company's decrease in average selling price (ASP), but this was also due to the fact that the product line-up was mature and few new products were launched during the period, Sony Ericsson said.
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