SOURCE: Ericsson

July 11, 2007 18:22 ET

Sony Ericsson Continues Profitable Growth and Market Share Gains

STOCKHOLM, SWEDEN--(Marketwire - July 11, 2007) - Sony Ericsson continues profitable growth and market share gains Q2 Highlights:

*   Continued strong year-on-year volume growth of 59%
*   Income before tax grew 55% year-on-year to EUR 327 million
*   Walkman® phone sales of 9 million in quarter sustain leadership
    in music phones
*   Expanded portfolio continues to generate market share gains
The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the second quarter ended June 30, 2007 is as follows:
                                             Q2 2006 Q1 2007 Q2 2007
Number of units shipped (million             15.7    21.8    24.9
Sales (Euro m.)                              2,272   2,925   3,112
Gross Margin (%)                             28.5%   30.3    29.6%
Operating Income (Euro m.)                   203     346     315
Operating Income (%)                         8.9%    11.8    10.1%
Income before taxes (Euro m.)                211     362     327
Net income (Euro m.)                         143     254     220

Average Sales Price (Euro)                   145     134     125
Units shipped in the quarter reached 24.9 million, a 59% increase compared to the same period last year, generating both year-on-year and sequential market share gains. Sales for the quarter were Euro 3,112 million, representing a year-on-year increase of 37%. Income before taxes for the quarter was Euro 327 million, representing a year-on-year increase of 55%. Net income for the quarter was Euro 220 million. In line with Sony Ericsson expectations, the increase in Q2 in low and mid-tier priced phones in the product portfolio resulted in a decline in ASP to Euro 125.

"Sony Ericsson has continued to capture market share in a more competitive market place with a product offering that addresses a wider consumer audience than ever before. Our financial results for Q2 2007 reflect our direction to build our brand in key imaging, music and multimedia categories with a portfolio that includes more competitively priced phones," said Miles Flint, President of Sony Ericsson. "We expect the market in 2007 to remain competitive, but with recently announced products such as the flag-ship Walkman® and Cyber-shot™ models we aim to continue to grow faster than the market."

During the quarter Sony Ericsson continued to capture market share in Latin America, Western Europe and CEEMEA (Central and Eastern Europe, Middle East, Africa) due to low and mid-tier feature phones such as the W300 and W200 Walkman® phones and the K310 and Z310 phones. At the same time, the company continued to strengthen its product line up by announcing a large number of new products across a variety of price points, including the K850, an HSDPA, 5 mega-pixel flag-ship Cyber-shot™ phone, and the W960, a high-end Walkman® phone with 8GB of on-board storage.

Following an announcement in January that Sony Ericsson would start the local manufacture of phones in India through its global manufacturing partners Flextronics and Foxconn, in Q2 the company extended its commitment to this important and rapidly growing market by announcing plans to establish its own research and development unit in Chennai later in the year.

In Q2 new trademark royalty fees were agreed with the parent companies, and these additional expenses were recorded for the first time in the second quarter.

Sony Ericsson forecasts that the 2007 global handset market will be above 1.1 billion units. The company grew market share in Q2 2007 around 3 percentage points to well over 9% compared with the same period last year.

WALKMAN® and Cyber-shot™ are trademarks or registered trademarks of Sony Corporation.


Financial Statements and Additional Information:

Financial Statements:

Consolidated Income Statement
Consolidated Income Statement - Year-to-Date
Consolidated Income Statement - Isolated Quarters
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows - Year-to-Date
Consolidated Statement of Cash Flows - Isolated Quarters
Additional Information:

Net Sales by Market Area by Quarter

Sony Ericsson Mobile Communications serves the global communications market with innovative and feature-rich mobile phones, accessories and PC-cards. Established as a joint venture by Sony and Ericsson in 2001, with global corporate functions located in London, including R&D sites in Europe, Japan, China and America, Sony Ericsson celebrated the 5th anniversary of the start of the joint venture on 1st October, 2006. Sony Ericsson is the global title sponsor of the Women's Tennis Association, and works with the Association to promote the Sony Ericsson WTA Tour in over 80 cities during the year. For more information on Sony Ericsson, please visit

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see Sony's and Ericsson's filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.

The full report (including tables) can be downloaded from the following link:

Copyright © Hugin ASA 2007. All rights reserved.

Contact Information


    Ericsson Investor Relations
    Gary Pinkham (Stockholm)
    +46 8 719 0858

    Sony Investor Relations
    Tatsuyuki Sonoda (Tokyo)
    +81 3 6748 2180
    Shinji Tomita (London) +44 207 444 9713

    Sony Ericsson Corporate Communications
    Aldo Liguori (London)
    +44 208 762 5860
    Merran Wrigley (London)
    +44 208 762 5862