Sony Ericsson's last quarterly results before it becomes just Sony aren't pretty
0. phoneArena 19 Jan 2012, 02:59 posted on
Sony Ericsson just published its Q4 and FY2011 earnings, and the issues that seemingly plagued HTC and, basically everyone but Samsung and Apple, like "intense competition and price erosion", have made it swing to a $317 million loss in Q4. Before that, in Q3, the company even eked out a profit, but now it tacks on "restructuring charges", and "Thailand flooding" to the list of reasons for its significant loss for the last quarter...
This is a discussion for a news. To read the whole news, click here
1. darac (Posts: 2156; Member since: 17 Oct 2011)
oh man. this is a scary and sad surprise.
I don't understand, they shipped even more smartphones(7.5-8 million xperias) than in the Q 3, and they have such loss..
2. Daniel.P (Posts: 102; Member since: 14 Jul 2011)
Actually Sony shipped 9 million handsets in Q4, compared to 9.5 million in Q3, as per the table. The biggest reason seems to be its operating margin going from 2% in Q3 to -10% in Q4 (if we count the restructuring charges, it went to -18%).
Increased expenses (Thailand floods and restructuring), coupled with diminishing average selling price of its handsets (you can find an Xperia arc for way less than $400 unlocked now), are what brought the loss on, but the picture should be different next quarter.
3. darac (Posts: 2156; Member since: 17 Oct 2011)
actually I have to correct my self.
they shipped about 7.2 million xperias, which is almost the same as in third quarter.
but those numbers are still keeping Sony on third place of all android manufacturers.
and even more interestingly, when you count in the number of android models they have on offer-just around 10 phones I think! - turns out SE SELLS RELATIVELY MORE ANDROIDS THAN ANY OTHER BRAND.
So even with floods, restructuring charges and drop of the margins per phone this is a strangely huge loss to me
4. darac (Posts: 2156; Member since: 17 Oct 2011)
@Daniel, yes, but you talk overall sales, which include feature phones.
their smartphone sales accounted to around 80 percent of the overall 9M sales in Q 4.
in Q 3, the corresponding number was around 70 percent out of 9.5M.
5. Daniel.P (Posts: 102; Member since: 14 Jul 2011)
True, but unfortunately, out of these smartphones, they didn't make a single popular high-end dual-core handset in 2011, for which they could charge $600+ with a fat margin, like Apple or Samsung do, which really weighed on Q4, when costs of production apparently increased due to the floodings and other issues, while the ASP went down.
6. darac (Posts: 2156; Member since: 17 Oct 2011)
not to mention their last touch screen feature phone efforts which were basically thrown money
7. TheLibertine (Posts: 484; Member since: 15 Jan 2012)
A thing Sony should try is to move the Playstation Portable (Vita) platform with the best of its games to their higher-end smartphones. And of course, be a bit different from Samsung that fascinates you with great specs, but great specs only, like they did it with the Tablet S.
8. RamyRamz69 (Posts: 390; Member since: 12 Dec 2011)
I really hope the next quarter is better for Sony. I love how they innovate, make different designs and most of all stay loyal to customers.
Yes, my Xperia Arc doesn't have the best dual core processor in 2011, neither 1 GB of RAM, no front facing camera, not the best 8MP Camera available around, but I just love it as it is and if you offer me the best phone available now I will deny it because I just simply love how Sony puts that touch on their phones.
10. dmn666 (Posts: 208; Member since: 19 Oct 2011)
Arc/ Arc S are great phones and very reasonably priced. But Sony needs to catch up on HW specs for their flagships. Ion and S look good, yet they will probably get overshadowed by quadcores.Their flagships used to be pretty high-end. I wonder what made them solely focus on mid-range phones. Profit margin is pretty low there.
11. darac (Posts: 2156; Member since: 17 Oct 2011)
i think the concept of joint venture was dragging the thing.
they company was just too slow and non-reactive, without full support and devotion of neither the Sony neither Ericsson.
they released a flagship in march an that was it.
and were almost completely absent in US market.
anyway i'm sure Sony bought off the shares realizing that, realizing that phones are THE business now, and they're all set to roll it big time now.
i mean you can see that already - apart from launching a major device on the greatest US carrier for the first time (Xperia Ion), they will release a great phone in march (Xperia s), and then two even bigger guns later in Q3/Q4 ("Hayabusa" and "Mint")
it's a complete reboot and a whole other story. now lets just take some patience and wait Q2.