Hard times have gone global. Financial struggles in global economies have apparently started to affect our precious consumer electronics markets. So much so that the world’s fourth largest handset manufacturer has just issued a profit warning due to lacking handset sales in key European markets. Sony Ericsson says that sliding sales of mid- to high-end mobile phones will negatively impact Q1 2008 earnings.
So, in order to stay on track to become the world’s third largest mobile phone manufacturer by 2011, Sony Ericsson will be shifting focus on increasing sales in countries like China and India by increasing its handset portfolio, presumably in the low-end which has strengthened industry leaders’ positions. Sony Ericsson also wants to increase sales in the US.
Analysts point toward the global economic turndown as the biggest cause of Sony Ericsson’s lacking sales. A weaker global economy means consumers are less likely to buy new handsets to replace their old handsets.
And, the financial woes seem to be affecting the industry as a whole. The largest handset manufacturers are somewhat insulated from the rough waters – their strength in emerging markets with low-end handsets seems to be the strategy that will keep them from feeling the financial crunch – a strategy that might be the road to prosperity for Sony Ericsson.
[Via: FT]