Sony Ericsson Issues Profit Warning
Sony Ericsson is currently in damage limitation mode, having to release a warning about Q2 profits that could upset investors. In that there are none. They released a report on June 28th that they will just about break even over the second quarter, blaming underwhelming sales of expensive handsets and product delays.
In what can only be described as an understatement, they described market conditions as “challenging.”
Now, Sudoku puzzles are challenging. Combating a 15% decline in the European mobile phone market as a whole is something else entirely.
Sony Ericcson seems to be the industry whipping boy of late, with a run of very bad luck. Spending seven figures appointing Maria Sharapova as their first ever brand ambassador, only to see her beautifully destroyed in the French Open and Wimbledon wasn’t doing wonders for their PR strategy. Also the rumours of Sony’s disappointment in their Swedish partner’s performance to the extent that they may leave them out of the PSPhone’s development cannot be good news.
As a result, Ericcson shares are down more than 11 percent following this profit warning, leading analysts to draw parallels between their and Motorola’s woes with an over-reliance on a few successful models rather than attempts at innovation.
Granted it is a very competitive landscape, with most of the major manufacturers speaking of their trepidation at the industry’s immediate future, but to move from 64% sales growth in Q1 2007 to 2% a year later is troubling.
Xperia X1. That’s what Sony Ericsson needs to release. Yesterday. If they get their development times down to a reasonable turnaround instead of the 2 years the Xperia has floated around for, then they would be far more successful at remaining competitive and current.
Source : Reuters
Tags: Sony Ericsson, Xperia X1
