HomeInsightsSony Ericsson marks record quarter to cap record year

    Sony Ericsson marks record quarter to cap record year


    Q4 Highlights:
    * Year-on-year volume & sales growth of over 60%
    * Income before tax up 144% year-on-year
    * Hit products drive market share gains

    2006 Highlights:
    * Volume & sales grow to 74.8 million units and 10,959 million Euros respectively, double the global market growth rate
    * Income before taxes grows to 1,298 million Euros
    * 60 million music enabled phones, including 17 million Walkman phones sold
    * Strong growth in Latin America, Asia Pacific and Europe

    Sony Ericsson says it increased market share during Q4 2006 due to the continued success of products such as the K800/K790 Cyber-shot phone and Walkman phone line-up. Average Selling Price (ASP) was slightly higher than expected due to more favourable than expected market conditions and continuing strong demand for Sony Ericsson’s hit model handsets. Particularly strong growth in emerging markets in Latin America and Asia Pacific, as well as in Europe, is claimed to illustrate Sony Ericsson’s success at expanding the portfolio to increase market share in new markets with attractive mid-tier products, and without undermining profitability.

    Units shipped in  the quarter  reached 26.0 million,  a 61%  increase compared  to  the  same  period  last  year,  generating  significant year-on-year market  share gains.  Sales for  the quarter  were  Euro 3,782 million, representing  a year-on-year increase  of 64%.  Income before taxes  for the  quarter was  Euro 502  million representing  a year-on-year increase of 144%.  Net  income for the quarter was  Euro 447 million.

    “The fourth  quarter saw  Sony Ericsson  finish a  strong year  with record volumes, sales and net income due to the soaring popularity of our  imaging  and  music  phones.  Earlier  investments  in  R&D  and marketing have enabled us to expand the portfolio and strengthen  the brand to increase  consumer and operator  appeal.  Our  target is  to become one of the top three players in the industry, and the momentum we established in 2006 makes this an achievable ambition,” said Miles Flint, President of Sony Ericsson.

    Sony Ericsson  estimates  the 2006  global  handset market  as  being around 980 million units, higher than previous forecasts of over  950 million units for the year. On this basis the company believes it has outperformed the  market during  the quarter,  gaining around  1%  of market share  sequentially,  to  achieve a  global  market  share  of approximately 9%  during Q4.  In Q4  2006 Sony  Ericsson grew  market share slightly over 2% against the same period for the previous year.

    During the fourth quarter Sony Ericsson announced it had reached agreement in principle to acquire the Swedish software company UIQ Technology AB, a wholly owned subsidiary and business of Symbian Ltd. The company expects the transaction to be completed during the first quarter 2007.