Sony Ericsson blames component shortages for poor results

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For the second time this year, Sony Ericsson has blamed component shortages for disappointing handset sales in a quarter. It has also pointed the finger at increased R&D costs.

Strange, then, that company spokesperson, Aldo Liguori, admitted that only a handful of new handsets hard started shipping and at the end of the period, too. Plus the company said it was concentrating on updating existing products.

And R&D costs still rose. Given that back in March Sony Ericsson had said that, "certain component shortages for popular mid-priced phones" were the cause of lower than expected sales," the company still doesn't seem to have sorted the problem.

Although the actual number of handsets shipped in the last quarter rose to 24 million units, the average selling price dropped from €115 (US$182) from €121 (US$191).

The biggest disappointment for Sony Ericsson is the huge dent that all this has put in its ambitions. At the beginning of the year, Dick Komiyama, Sony Ericsson President, had pronounced, "Our objective remains to become a top three player globally by 2011."

Instead it has recently lost fourth spot to LG and slipped to the Number Five top selling handset maker worldwide.

The future could be even bleaker for the company as it is widely accepted that sales of low end handsets helped LG overtake Sony Ericsson and emerging Asian phone manufacturers are strong in this sector.

Instead, Sony Ericsson has chosen to embrace Windows Mobile in an attempt to fend off competition at the high end from Apple and Research in Motion.

Its investmen in UIQ hasn't exactly paid dividends now that has become part of the Symbian Foundation.

The jewel in the company's crown is the Walkman phone range. What it needs is a good Wallman phone Nano that it can flog as an entry level handset. (c) 2010 Incisive Media

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