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Sony Ericsson Blames Quake for Q2 Slump

Sony Ericsson Mobile Communications has blamed its second-quarter malaise on parts shortages caused by the impact of the Japanese earthquake that struck in March.

The mobile device vendor dipped into the red with a net loss of €50 million (US$70.6 million) following five consecutive quarters of net profit and saw its revenues dip by 32 percent to €1.19 billion ($1.69 billion).

The company shipped 7.6 million devices in the three months to the end of June, down 31 percent compared with the same period a year ago, while the average selling price (ASP) for those devices was down 3 percent to €156 ($221).

It estimates that the impact on its supply chain resulted in 1.5 million fewer devices being shipped but that most of that impact was felt in the early part of the second quarter.

The company had avoided much impact from the March 11 earthquake and tsunami during the first quarter, but it seems the mobile device sector is in for a tough few quarters as the impact of that natural disaster starts to hit shipments and financials. (See Sony Ericsson Stays Profitable Despite Quake.)

On a brighter note, the company says smartphones now account for 70 percent of its sales and that it has shipped more than 16 million Xperia devices to the end of June. It believes its smartphone market share during the second quarter was about 11 percent (in terms of units sold and in revenues).

Sony Ericsson has launched eight new Xperia smartphone models so far in 2011 and claims it is seeing strong demand for the Xperia range. (See Sony Ericsson Intros PlayStation Phone and Sony Ericsson Adds Androids.)

— Ray Le Maistre, International Managing Editor, Light Reading

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