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Sony Ericsson sees further profit slump

Sony Ericsson looking to the Play for future profitability
Sony Ericsson looking to the Play for future profitability

Sony Ericsson is battling against sliding profits and handset sales, and new figures show the company is still seeing a downturn in key areas.

After profits, revenue and handset sales all fell in Q1 2011, the only positive was the slight rise in handset cost, which came in at an average of €141.

The main concern for Sony Ericsson is the number of handsets sold - in Q1 2010 it shifted 10.5 million, but in the same period this year that number was down to only 8.1 million, which the company puts down to a reduction in the number of feature phones sold.

According to the Guardian, this means that the company is now shifting fewer units than HTC by volume, plopping it down to ninth in the world behind the likes of RIM, Nokia and Apple.

Profit is still profit

But onto the good news for the company - the gross margin for Q1 2011 was up to 33 per cent thanks to the higher selling prices of the phones and other miscellaneous items.

And despite the falls, Sony Ericsson's restructuring plan (which saw it shed a number of employees) is now no longer costing any money, and the company still posted a profit of €11 million (£9.6 million) after tax - although this was on sales of nearly £1 billion.

Bert Nordberg, President & CEO of Sony Ericsson said: "Sony Ericsson's profitability continues as we accelerate our shift towards an Android-based smartphone portfolio, with smartphones comprising over 60 per cent of our total sales during the quarter.

"Towards the end of the quarter we introduced the highly anticipated Xperia Arc and Xperia Play, which have been well received by both operators and consumers around the world. However, the Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain. We will continue to evaluate the situation."

If you love a good table of numbers relating to a Japanese-Swedish alliance (and, let's be honest, who doesn't?) then head on over to Sony Ericsson's website and check them out in all their off-green glory.

Gareth Beavis

Global Editor-in-Chief

Gareth was in charge of phones, tablets and wearables at TechRadar for the best part of a decade and now runs the entire editorial team. He can instantly recommend the best phone for you, or can be found running around the nearest park with the latest fitness tech strapped to his wrist, head or any other applicable body part.