Mobile phone manufacturer Sony Ericsson said today that intense competition hit fourth quarter sales hard and forced the company to post a loss of €247m for the year.
Sales in the final quarter dropped to €1.29 billion, a decline of 18.8% from €1.59 billion the previous quarter and of 15.7% from €1.53 billion in the fourth quarter of 2010.
"Our fourth quarter results reflected intense competition, unfavourable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter," chief executive Bert Nordberg said. The company said that sales dropped 17.2% overall in 2011.
Restructuring charges of €93m in the final quarter contributed to the poor results, but even excluding those charges operating margin plunged to -10%.
"Fourth quarter sales were negatively impacted by macroeconomic challenges in advanced economies contributing to weaker holiday sales, and certain component shortages from the flooding in Thailand in late October and early November 2011," the company said.
"In spite of these challenges, throughout 2011 weve shifted our business from feature phones to smartphones, and our Android-based smartphone sales in the quarter increased by 65% year-on-year," Nordberg said.
The number of units shipped in the fourth quarter dropped to 9 million however, from 9.5 million in the third quarter and 11.2 million in the final quarter of 2010. The average selling price declined to €143 in the fourth quarter of 2011 from the €166 in the third quarter.
