Sony Ericsson's revenue and profit drop in first quarter

Shipment volumes fell too, but the company saw an increase in the average selling price of the phones it shipped

Sony Ericsson Mobile Communications sales and profit dropped in the first quarter of 2011, the company reported Tuesday

Sales for the first quarter were €1.14 billion (US$1.56 billion as of March 31, the last day of the period reported), a decrease of 19 percent year-on-year. Net profit was €11 million, compared to a €21 million profit in the first quarter of 2010.

The company shipped 8.1 million phones during the quarter, a 23 percent decrease year-on-year. Sony Ericsson said feature phone shipments fell, and the release of the Xperia arc and the game-centric Play smartphones late in the quarter meant it failed to make up ground with shipments of high-end phones.

Sony Ericsson estimated its smartphone market share for the quarter at about 5 percent by volume and 3 percent by value.

The company's average selling price per phone during the quarter was €141, a 5 percent increase year-on-year and also an improvement on the fourth-quarter average of €136 per phone. Sony Ericsson said that prices continue to erode, however, and the increase was a result of product and geographical mix. The company still has a way to go before it can reach the average selling price of €160 it saw in the second quarter of last year.

The company is now hoping that the Android-based Xperia Arc, Neo and Play will help improve its fortunes during the second quarter of this year. The Arc and Play have been well received by operators and consumers around the world, Sony Ericsson said. The company will also soon start shipping the Xperia pro, and has also hinted that its Mini family will be replaced with new models.

However, the earthquake in Japan has affected some of Sony Ericsson's suppliers there. Days after the quake, the company said it would consider relocating some component manufacturing and look for alternative suppliers, and on Tuesday it said it was still experiencing some disruptions to its supply chain.

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Copyright © 2011 IDG Communications, Inc.

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