Ericsson joint ventures struggling along

Swedish infrastructure vendor Ericsson reports its financial results next week, but statements from its two joint ventures on Friday do not bode well for the firm.

Handset venture Sony Ericsson, to be fair, is moving in the right direction. Fourth quarter loss shrank to €167m in 2009, from €187m in 2008, but sales also shrank from €2.9bn in the fourth quarter of 2008 to €1.7bn in 2009.

Units shipped in the quarter hit 14.6 million, a sequential increase of 3 per cent and a year on year decrease of 40 per cent. The average selling price (ASP) of a device also took a slight hit, dropping €1 from the fourth quarter of 2008 to €120 in 2009.

“The year on year decrease in both units and sales was mainly due to a downturn in the global handset market and a faster than anticipated shift to touch screen phones in the mid-priced sector of the market,” said Sony Ericsson president, Bert Nordberg.

But over at Ericsson’s joint venture chip shop, ST-Ericsson, things aren’t looking so rosy. Net loss rose to $125m in the fourth quarter of 2009 from $112m in the third quarter of the same year. Revenues also fell year on year from $746 in the fourth quarter of 2008 to $740 in 2009, but were up sequentially in the fourth quarter from $728m in the third quarter 2009.

ST-Ericsson president and CEO, Gilles Delfassy, said that in the fourth quarter the company gained momentum in China with a focus on TD-SCDMA, delivering more than 6.5 million chipsets to the Chinese market.

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