Sony Ericsson predicts gloomy 2009

The company made a net loss of ?187 million (US$247 million) for the quarter, worse than its third-quarter loss of ?25 million, it said Friday. The figure contrasted with the net profit of ?373 million Sony Ericsson made in the year-earlier quarter, and dragged it to a net loss of ?73 million for the full year 2008, compared to a net profit of ?1.11 billion in 2007.

Despite the end-of-year holiday shopping season, it sold only 24.2 million phones during the fourth quarter, down from 25.7 million in the third quarter and 30.8 million during the fourth quarter of 2007. Sales in the fourth quarter totalled ?2.91 billion, down from ?3.77 billion a year earlier, while full-year sales dropped to ?11.2 billion from ?12.9 billion in 2007. Sony Ericsson blames the global economic slowdown for its problems, and expects the difficulties to continue this year, especially during the first six months.

To turn things around it will look for ways to cut costs by a further ?180 million each year, in addition to the ?300 million it already expects to save through, for example, the elimination of 2,000 jobs it announced in July. But cost cutting won't be enough to turn things around; more new, cool phones are also needed. Part of Sony Ericsson's plan is to intensify its efforts at the top end of the market, combining music, imaging and Internet services, said Anders Runevad, corporate executive vice president, speaking in a conference call.

Among those high-end phones will be one running Android, the operating system backed by Google and the Open Handset Alliance, which Sony Ericsson joined in December. However, Sony Ericsson won't say when its Android phone will ship.