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Sony Ericsson profit suffers from outdated handsets

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Sony Ericsson profit suffers from outdated handsets
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Sony Ericsson says it is pinning its hopes for improved profits on a new line of smartphones this year.

The joint venture between Sweden’s Ericsson and Japanese group Sony had to slashed prices to get people to buy its ageing handsets over Christmas and that hurt sales and profit in the final quarter of 2010.

Much will depend on its new Xperia smartphones, which run Google’s Android software.

Sony Ericsson made a pretax profit of 35 million euros on sales of 1.53 billion.

Niklas von Stackelberg, an analyst at Macquarie Research said: “It’s a disappointment, and I think it’s going to be in stark contrast to numbers we will see coming out of Samsung in particular, but also Motorola, LG Electronics and HTC.”

He added: “Those we think we are the winners currently of the smartphone boom. Apple is already there, doing very well.”

Sony Ericsson has slashed costs and focused on high-end smartphones that run on the Android operating system, turning a string of quarterly losses into profit last year, but that momentum seems now to have stalled.

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