Sony Ericsson: Q2 2008 is no good
Sony Ericsson-the Japan-Sweden joint venture-finally reveals their Q2 2008 Financial Report (which ended 30 June). I look on the report at glance and have no satisfaction. The net income for Q2 is only 6 million Euro! What? It is less than 5%-exactly only 2.72%-compared to last Q2 2007 which resulted 220 million Euro! How that situation may happen?
Most likely, the profit goes to R&D investment, which has been projected since Q1. Sony Ericsson is quite aggresive this year. SE creates 12 phones this quarter alone. They try to announce (and market) many kind of variants-even when the different is only about network connectivity or other features, a strategy used by Nokia. In sales, actually the report gave good news.
Total sales this quarter is higher than the first quarter this year (24.4 million units to 22.3 million). Yet, the result wasn’t reach the last year Q2. Sony Ericsson claimed, there are at least four reasons why SE has such declining financial report:
- Competition. There are lot of new competitors, which is claimed to be challenging
- Investment on R&D. To create great phones, we need to finance R&D for better and more unique product
- Company restoration. They aware that alignment of operations will help restore profitable growth
- Open Mobile Platform and Symbian Foundation. To finish this project, they need lot of works and time to fulfill it.
I need to add one into the list, the global sales is quite unexpected since of course the wild increasing of crude oil prices. Here come the full version of the report: (1st column is for Q2 2007, the 2nd is for Q1 2008, while 3rd column is for Q2 2008)
|
|
|||
| Number of units shipped (million) |
24.9 |
22.3 |
24.4 |
| Sales (Euro m.) |
3,112 |
2,702 |
2,820 |
| Gross margin (%) |
29.6% |
29.2% |
23.1% |
| Operating income (Euro m.) |
315 |
184 |
-2 |
| Operating margin (%) |
10.1% |
6.8% |
-0.1% |
| Income before taxes (Euro m.) |
327 |
193 |
8 |
| Net income (Euro m.) |
220 |
133 |
6 |
|
|
|
|
|
| Average selling price (Euro) |
125 |
121 |
116
|
Dick Komiyama-CEO of Sony Ericsson, claimed that, “Our target is to achieve a reduction in operating expenses of Euro 300 million annually, with the full effect expected to appear within a year. We estimate that our restructuring charges will be of the same magnitude as our reduction in operating expenses, and we will incur such charges as our measures are implemented.”
i meant 3G
should be cheaper though…
