Sony Ericsson’s Profits Decreasing

In this third quarter, Sony Ericsson must swallow a bitter reality. Their sales decline by 10 percent. After all, profit also decreased. The number of mobile phones which Sony Ericsson sold in the quarter was decreasing to 25.7 million units from 25.9 million units in the same period last year. However, the number of sales is still better than the previous quarter, that is 24.4 million units. In this third quarter, the total sales is 2.8 billion euros, or about U.S. $ 3.7 billion.

The consumers demands for cheap mobile phone and fluctuations in currency values are the main cause of decline. It can not be denied that, in general, consumers prefer cheap phones for their needs. In the third quarter, Sony Ericsson profits is 12 million euros, or about U.S. $ 16.2 million. If the restructuring cost is counted then Sony Ericsson experienced a loss of 23 million euros.

The average selling price of a Sony Ericsson mobile phone have declined, namely, from 116 euros to 109 euros. This trends is not only experienced by Sony Ericsson. Nokia reported in the third quarter, their profit’s also experienced a decrease of 30 percent. Market share become tight because the price war.

October 18, 2008 | Filed Under Handphone 

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