Sony Ericsson sales slump and profit vanishes

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Sony Ericsson sales slump and profit vanishes

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Sony Ericsson’s much worse than expected fourth quarter performance — with pretax losses of 247 million euros — has wiped out all of its profit for 2011.

The world’s ninth-biggest mobile phone maker was hit by the global downturn, which led to cuts in handset prices.

Fourth-quarter sales — which usually jump due to the holiday season — fell 16 percent year-on-year.

Sony Ericsson shipped nine million units in the fourth quarter, down 20 percent on last year, with smartphone deliveries failing to compensate for falling so-called feature phone sales.

Although the company will shift all its production to smartphones during 2012, feature phones still make up some 20 percent of Sony Ericsson’s sales volumes.

Taiwanese group HTC, BlackBerry-maker Research In Motion and Motorola Mobility have all warned of weak sales in the holiday season, a key period for mobile firms.

World number one handset maker Nokia, also struggling in the smartphone market, will report results on January 26.