Sony Ericsson battles poor mobile profits

Samsung performance worries Asia markets

Mobile phone producer Sony Ericsson reported Friday that its sales, profits, and prices all fell in the first quarter of 2005.

Blame for this was put on a consumer preference for cheaper phones and excess inventories built up before Christmas.

The company reported that pre-tax profits fell by 28 percent and that sales had dropped by 4 percent in the first quarter.

These figures were well below expectations and were said to emphasize the wild fluctuations of the mobile phone market from quarter to quarter because of the very short life of phones.

One reason given for the first-quarter fall in earnings was Sony Ericsson’s difficulty in distinguishing itself from its competitors. Much of its profits last year depended on its quick jump into the production of camera phones.

But cameras have become a standard feature in most middle and upper tier mobile phones, removing much of Sony Ericsson’s justification for pricing its phones higher.

The company also claimed that prices were somewhat lower due to the fact that few new products were launched during the period but claimed that new-product launches during the rest of the year would strengthen its position.


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