Q1 Highlights:
  • Year-on-year volume growth of 2%
  • Income before taxes at higher end of forecast
  • R&D investment continues to expand portfolio and addressable market
  • New sub-brand XPERIA(TM) added to portfolio
The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the first quarter ended March 31, 2008 is as follows:






Units shipped in the quarter were 22.3 million, a 2% increase compared to the same period last year and in line with our March 19, 2008 interim announcement of 22 million units. Sales for the quarter were Euro 2,702 million, a decrease of 8% on a year ago due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence. Gross margin was one percentage point lower than Q1 2007, reflecting a less favourable product mix. Income before taxes for the quarter was Euro 193 million, which was at the higher end of the range (Euro 150-200 million) we announced on March 19, 2008.  This represented a decrease of 47% compared with a year ago, due to higher R&D investments as a percentage of sales, and reflecting that Q1 2007 was a particularly strong first quarter for the company.  Net income for the quarter was 48% lower, at Euro 133 million.


"Sony Ericsson continues to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets," said Dick Komiyama, President, Sony Ericsson. "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008."


During the quarter, Sony Ericsson added a new sub-brand to its product portfolio with the announcement of the XPERIA(TM) X1, a high-end multi-media convergence phone based on Windows Mobile®, which will launch in the second half of the year.  In addition, the company announced a number of new phones during the quarter to increase the appeal of its brand to a broader audience.  These included new high-end Walkman® and HSDPA web phones, such as the W980, W760, Z770 models and also added to its cutting-edge Cyber-shot(TM) range with models such as the C702 and C902.  


Average selling price (ASP) decreased both sequentially and year-on-year due to the impact of softer sales of high-to-mid end models in key markets. Market share for the quarter is estimated to be around 8%, down one percentage point sequentially.


Sony Ericsson made a dividend payment of Euro 470 million during the quarter to the parent companies.  A second dividend payment will be made this year. 


Sony Ericsson forecasts that the global handset market for 2008 will grow at a rate of around 10% from more than 1.1 billion units in 2007. The majority of this growth is expected to be in emerging markets.


XPERIA(TM) is a trademark of Sony Ericsson Mobile Communications
WALKMAN® and Cyber-shot(TM) are trademarks or registered trademarks of Sony Corporation.
Microsoft and Windows Mobile® are trademarks of Microsoft Corporation
 
EDITOR'S NOTES:
 
Financial statements and additional information:


Financial statements:


Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters


Additional information:


Net sales by market area by quarter


- ENDS -


Having sold over 100 million phones in 2007, Sony Ericsson is currently one of the five largest mobile phone manufacturers in the world.  An important industry player operating in over 80 countries, our phones, accessories and PC cards are synonymous with innovation and style.  With R&D sites in Europe, Japan, China, India and North America, diversity is one of the core strengths of the company.  Sony Ericsson was established as a 50:50 joint venture by Sony and Ericsson in October 2001, with global corporate functions located in London. For more information about Sony Ericsson please visit www.sonyericsson.com
                           
CONTACTS:


Investors / Analysts
Ericsson investor relations                                        
Gary Pinkham (Stockholm) +46 8 719 0858                  
 
Sony investor relations                                                                                
Shinji Tomita (London) +44 20 7444 9713
Tatsuyuki Sonoda (Tokyo) +81 3 6748 2180   
 
Press / Media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Merran Wrigley (London) +44 20 8762 5862
 
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: