Sony Ericsson soldiers on

Swedish Japanese handset JV Sony Ericsson launches three new Walkman phones today. However, yesterday’s poor second quarter turn out – when the firm announced a massive slide in profits and the loss of 2000 jobs – will cast a huge shadow over the latest additions.

The launch of the W902, W595 and W302, and seven music accessories, coincides with the Walkman phone’s third birthday. In the three years, since the first Walkman phone launched, Sony Ericsson has seen its position as a top five player come under significant threat. The vendor slipped from fourth placed to fifth (behind LG) earlier this year.

The firm announced that they sold nearly as many handsets during the second quarter of this year as the corresponding period in 2007, 24.4 million versus 24.9. The sales corresponded to revenues of Euro2.8bn for Q208 compared with Euro3.1bn last year.

Nomura analyst Richard Windsor notes that the firm reported results in line with reduced expectations but scotched any hopes of a recovery in 2008. “We think that Sony Ericsson will refocus on its core competences to regain its lost profitability,” he said, “Competition is increasing here, but gross margins have held up better than we had feared. This gives the company better scope to return to a reasonable level of profitability within the time frame it has set. That being said the outlook for the rest of the year is disappointing and we had hoped that there would be a better recovery in H2 2008.”