With so many great smartphones available today and 4G on the horizon for tomorrow, wireless is unquestionably hot. But some handset manufacturers are struggling nonetheless as the economy slowly makes a comeback.
Sony Ericsson’s (News - Alert) latest third-quarter results, reported this week, show the handset maker posting its fifth straight quarterly loss. The company repored a $245 million net loss in the third quarter, compared with a $37.7 million loss in the third quarter of 2008. Though the handset maker shipped 14.1 million units during the quarter, total sales dropped from $4.17 in the same period last year to $2.4 billion.
“I have been watching this good company struggle for years. It makes basic cell phones which are just not selling, either because of the bad economy or a change in the cell phone market, or both,” said Jeffrey Kagan, telecom analyst and publisher of the Jeff Kagan Report & Comment. “Smartphones are where the growth is right now and Sony Ericsson (News - Alert) is just not there. Will they be going forward is the question.”
However, all is not lost, say some analysts, noting that the company is taking actions toward turning things around. Prior to its earnings release, Sony Ericsson switched its CEO: Bert Nordberg (News - Alert), the head of Ericsson’s Silicon Valley unit, will replace President and CEO Dick Komiyama.
According to Fierce Wireless, the “one bit of bright news” that came out of the call was when Sony Ericsson said that it had signed credit facilities of $676.3 million, with about $520 million of them guaranteed by its parent companies on a 50/50 basis.
“Sony Ericsson is a good company with good people,” Kagan said. “Can they recover? Yes they can, but they need to take a new and different path going forward.”
Marisa Torrieri is a TMCnet Editor. To read more of her articles, please visit her columnist page.Edited by
Marisa Torrieri