Sony Ericsson Q3 Net, Unit Sales Up

By Steve Smith On Oct 23 2006 - 6:00am

Sony Ericsson Mobile Communications celebrated its fifth anniversary with its net income nearly tripling as unit sales grew by 43 percent during the third quarter ended Sept. 30.

Units shipped in the quarter reached 19.8 million, a 43 percent increase compared to the same period last year, and approximately double the market growth rate, the company said. Sales for the quarter were $3.65 billion vs. last year's third quarter of $2.58 million.

Net income for the third quarter was $373.6 million vs. $130.43 million the same time last year.

Sony Ericsson captured market share during the quarter due to the success of hit products such as the K800 Cyber-shot phone and Walkman phone line-up. The company said it strengthened its music offering at the end of the quarter with the shipment of a new high-end Walkman phone, the W850, a tri-band/UMTS slider phone with storage capacity for up to 1,000 songs.

Sony Ericsson also said it enhanced its music position by upgrading its PlayNow service to include full track, over-the-air downloads to high-end Walkman models such as the new W850 and by launching M-BUZZ, a fixed and mobile Internet space to promote new artists and their music.

“The third quarter saw Sony Ericsson reap the success of hit products announced earlier in the year such as the high-end K800 and W810, mid-range K610 and lower-priced W300 and K310. Our strategy of using flagship products to give Sony Ericsson a lead position within a product category such as imaging with the Cyber-shot megapixel camera phone or music with the Walkman line-up is creating a halo effect over lower-end models in the same category and encouraging new users to try our phones,” explained Miles Flint, president of Sony Ericsson.

“We enjoyed a record quarter due to a favorable product mix, and after celebrating Sony Ericsson's fifth anniversary on Oct. 1, the financial results we've announced today further illustrate how far the company has come in a short time.”

Sony Ericsson continues to forecast the 2006 global handset market as being above 950 million units. On this basis the company believes it has outperformed the growth rate in the market and gained over 1 percent point market share this quarter, to reach a global market share of approximately 8 percent.