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More High-End Pain

4:25 PM -- Today's Q1 results from Sony Ericsson Mobile Communications show just how much demand is slowing for high-end smartphones in Western Europe and North America. (See Sony Ericsson Reports 1Q08.)

Nokia Corp. (NYSE: NOK) also noted this slowdown in its earnings results last week, but it is in a better position to weather the tough market for smartphones because it has a strong low-end device business in developing markets. India and China account for 75 percent of the Finnish phone maker's sales. (See Nokia: High-End Hurt.)

"Unfortunately, Sony Ericsson has a high exposure to the fashion/mid- to high-end segment (60 percent of phones being branded Walkman or Cybershot), especially in Western Europe," writes Janardan Menon, a Dresdner Kleinwort analyst. "Unlike Nokia, weak trends in Europe were not sufficiently offset by growth elsewhere."

And Nomura Securities analyst Richard Windsor notes: "Sony Ericsson… confirmed our fears that the high-end of the market has been much softer than we were anticipating just a few weeks ago."

— Michelle Donegan, European Editor, Unstrung

IPobserver 12/5/2012 | 3:42:34 PM
re: More High-End Pain I think with Sony-Ericsson they had a good run with mid-range fashion phones G㢠Walkman brands especially.

But they haven't had anything really competitive at the high-end for a while to compete with Nokia and Apple. And for business users it's still all dangleberrys.

The new Xperia device with Windows looks a great form-factor and may change things for SonyEricsson in the high-end when it comes out.

Most interesting is that price of components to build high-end devices is plummeting and so were going to see a new category of 3G device emerging pretty soon G㢠portable web-tablet style gizmos, like the Nokia N810 or 3G iPhone, but cheaper. This will fuel the mobile internet.

Samsung and Motorola are in the same kind of position in the high-end market G㢠nothing really killer on the market that I've seen.
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