Sony Ericsson still has eyes on top three spot

Fourth placed handset vendor Sony Ericsson posted a strong set of results on Wednesday, shifting over 100 million units for the first time in 2007.

For the full year, net income climbed slightly from Eur997m to Eur1.1bn, with sales increasing from Eur11bn to Eur13bn.

Units shipped in the fourth quarter reached 30.8 million, an 18 per cent increase compared to the same period last year, offsetting concerns of a consumer slowdown in handset sales, although the average sales price dropped from Eur146 in the fourth quarter of 2006, to Eur123 in the same period 2007.

“Our target remains to become one of the top three players in the industry, and the momentum we established in 2006 and 2007 makes this a realistic and achievable ambition,” said Dick Komiyama, president of Sony Ericsson.

Ovum analyst, Martin Garner, said that taken in isolation these are healthy results, however, he thinks the volumes are a bit disappointing. “Motorola handed its competitors a gift last year by losing more than 40 per cent of its world market share – a lot of market share changed hands during 2007 and Sony Ericsson has not cashed in on that as well as Nokia, Samsung and LG have.”

Third placed handset vendor Samsung shipped 46.3 million devices in the quarter, a 41 per cent increase over the year, and 161 million handsets over 2007, marking a similar growth curve.

Sales for the telecoms department increased 6 per cent for the quarter to KRW5.37tn (Eur3.8bn) and 6 per cent for the year to KRW19.55tn, with handsets delivering KRW18.37tn.

“Having said that demand was strong, price competition was clearly tough in the quarter with revenue growth lagging shipments significantly,” said Garner. Samsung’s average sale price fell from $151 in the third quarter to $148 in the fourth.

“In looking forward Samsung plans to strengthen its high-end devices with more touch screen, GPS, 5 megapixel camera and smartphone devices,” said Garner, but added that to grow its world market share significantly, Samsung needs to push into lower price tiers.