With a slowing global economy, consumers are holding back their urge to splurge on new mobile phones. Sony Ericsson has been hit hard by decreased demand for cellphones around the world. The Japanese-Swedish cellphone maker has posted a negative Q4 2008 earnings report. The company’s €187 million ($245 million) loss in the fourth quarter highlights the impact of a global financial downturn. In comparison, Sony Ericsson posted a Q4 2007 profit of €373 million. Weaker handset sales and reduced margins were to blame for the manufacturer’s woes.
The company’s fourth quarter saw €2.9 billion (US$3.8 billion) in handset sales – a 23% decline from the year-ago quarter’s €3.8 billion. Sony Ericsson ended 2008 with a €73 million (US$96 million) loss, down from the €1.1 billion (US$1.45 billion) in profits that Sony Ericsson earned in the full 2007 year.
“In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn. The mobile phone market has been greatly affected by this and as expected, the fourth quarter continued to be very challenging for Sony Ericsson,” said Dick Komiyama, President, Sony Ericsson.
Komiyama confirmed that his company’s restructuring efforts were still on track to save Sony Ericsson €180 million (US$237 million) in annual operating costs. The savings will be realized towards the end of 2009, when restructuring efforts have been finalized.
For what it’s worth, Sony Ericsson has been putting out some desireable Cybershot cameraphones that might just help bring the company out of the red by the end of 2009.