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iPhone Knocks Sony Ericsson?

6:00 PM -- Sony Ericsson Mobile Communications gave a profit warning today in what could be a sign of a slowing European market for handset sales.

The company said it expected to report a pre-tax profit of €150 million to €200 million (US$235 million to $310 million ) for the first quarter "due to increased research and development expenses as a percentage of sales." This compared with previous analyst estimates of €305 million to €409 million.

"We believe there are 3 reasons behind today’s warning and that the issues are likely to continue at least into Q2 and possibly beyond," says UBS Research analyst Maynard Um in a report. These are:

  • Softer high-end demand in Europe (Sony-Ericsson most hurt by Apple iPhone)
  • Delays in new product launches (which led to higher R&D)
  • LCD screen shortages
It will be interesting to see if the same holds true for other smartphone vendors.

— Dan Jones, Site Editor, Unstrung

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