Sony Ericsson slips into the red ahead of rebrand
Brand Republic.com - Jan 20th 2012, 13:59
Sony Ericsson has announced losses of â‚¬207m (ÂŁ173m) for the fourth quarter of 2011, well below analysts expectations, shortly before it finalises the acquisition by Sony of Ericsson's stake in the business
The company blamed some of the losses on a â‚¬93m restructuring charge incurred in December as it looked to reduce costs and become more competitive ahead of it becoming a wholly-owned subsidiary of Sony.
Sony Ericssonâ€™s loss in the quarter ending 31 December comes as a particular shock after some analysts predicted it would make a profit. It compares to a flat third quarter and an â‚¬8m (ÂŁ6.7m) profit in the same quarter last year.
The company achieved sales of â‚¬1.3bn, down 16% year on year and 19% on the previous quarter.
Bert Nordberg, president and chief executive of Sony Ericsson, said: "Our fourth quarter results reflected intense competition, unfavourable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter."
Sony's acquisition of Ericsson's stake in the business is expected to close in the coming weeks and be followed by a new brand positioning supported by marketing campaigns for new products.
Sony Ericsson recently hired global branding consultancy The Gild to assist with "brand strategy, architecture and guidelines" as it evolves its Xperia smartphone brand and makes the transition to being completely owned by Sony.
Sony Ericsson is in the midst of shifting its business from feature phones to smartphones and says its Android-based smartphone sales in the quarter increased by 65% year on year.
In the US, the mobile firm recently unveiled the Xperia Ion for the AT&T network, which will be the first Sony-branded phone that doesnâ€™t carry the Ericsson name.
The Xperia portfolio, including the recently announced Xperia NXT series, will be the cornerstone of the brandâ€™s smartphone lineup in 2012.
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