Sony Ericsson’s Net Profit Jumps

Mobile-phone maker Sony Ericsson Wednesday said net profit more than tripled in the fourth quarter as it bucked an industry trend toward lower prices.

Sony Ericsson President and Chief Executive Miles Flint put the strong result down to strong sales of its Cyber-shot camera phones and Walkman digital music phones and strong growth in Latin America, Asia Pacific and Europe.

Net profit rose to €447 million ($577.3 million) from €144 million in the three months ended December. Revenue rose to €3.78 billion from €2.31 billion in the quarter.

The company, a joint venture between Telefon AB LM Ericsson and Sony Corp., bucked the industry trend towards lower prices by slightly raising the average price it received per handset to €146. Sony Ericsson shipped 26 million phones in the quarter, up 61% from the 16.1 million in the fourth-quarter of 2005.

In contrast, world No. 2 phone maker Motorola Inc. gave a profit warning on Jan. 5 after its average selling price fell much faster than analysts expected. (See related article.)

Falling prices per handset are also a serious issue for Nokia Corp., and other makers too, as sales shift to emerging markets where consumers buy more basic handsets.

Sony Ericsson said that it had outperformed the market adding one percentage point to achieve a global market share of 9% during the fourth quarter. “The fourth quarter saw Sony Ericsson finish a strong year with record volumes, sales and net income due to the soaring popularity of our imaging and music phones,” said Chief Executive and President Miles Flint.

Mr. Flint added that Sony Ericsson would be launching a new set of phones, including the ultra-thin W880 Walkman phone at the 3GSM mobile phone conference in Barcelona, in February.