Sony Ericsson sells over 100 million handsets in 2007

16 January 2008
Q4 Highlights:

• 18% increase in volume year-on-year
• Continued market share gains and profitable growth
• Continued investment for the future
  

2007 Highlights:

• Over 100 million units sold – more than double global market growth rate
• Margins remain strong as company shifts to broader portfolio
• Unit growth underpinned by increased sales of lower priced phones
• 145 million music enabled phones sold to date, of which 57 million were Walkman® phones – maintaining leadership in music
  

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the fourth quarter ended December 31, 2007 is as follows:

	Q4 2006	Q3 2007	Q4 2007	2006 FY	2007 FY
Number of units shipped (million)	26.0	25.9	30.8	74.8	103.4
Sales (Euro m.)	3,782	3,108	3,771	10,959	12,916
Gross Margin (%)	29.0%	30.7%	31.8%	29.1%	30.6%
Operating Income (Euro m.)	484	393	489	1,257	1,544
Operating Margin (%)	12.8%	12.7%	13.0%	11.5%	11.9%
Income before taxes (Euro m.)	50li2	384	501	1,298	1,574
Net income (Euro m.)	447	267	373	997	1,114
Average Sales Price (Euro)	146	120	123	146	125

Units shipped in the quarter reached 30.8 million, a 18% increase compared to the same period last year, generating continued sequential and year-on-year market share gains. Sales for the quarter were Euro 3,771 million, in line with sales a year ago reflecting a strategic shift to a greater proportion of lower priced handsets in the product portfolio. Income before taxes for the quarter was Euro 501 million in line with a year ago. Net income for the quarter was Euro 373 million.

Sony Ericsson gained market share during the quarter due to the continued success of such products as the K550 Cyber-shot™ and the W200, W300 and W580 Walkman® phones in the Americas and Europe. Although Average Selling Price (ASP) increased slightly sequentially during the quarter, as a result of the introduction of new flag-ship Walkman® and Cyber-shot™ phones such as the W910 and K850 models, the trend for falling ASPs year-on-year reflects the company’s direction to broaden its product portfolio.

“Sony Ericsson finished a very good year, which highlighted how the company has strategically positioned itself to capture market share with an expanded product portfolio. Investments are being made in both R&D and brand building, to deepen the portfolio and strengthen Sony Ericsson’s presence in new and developing markets around the world. Our target remains to become one of the top three players in the industry, and the momentum we established in 2006 and 2007 makes this a realistic and achievable ambition,” said Dick Komiyama, President of Sony Ericsson.

Sony Ericsson estimates the 2007 global handset market as being over 1.1 billion units, in line with previous forecasts. On this basis the company believes it grew market share around 2 percentage points to reach slightly over 9% for the full year 2007 compared to full year 2006.

During the fourth quarter Sony Ericsson announced that it had entered into a series of agreements with Motorola, Inc. whereby Motorola acquired 50% of the share capital in U.I. Holdings BV, the Dutch owner of the Swedish software company UIQ Technology AB, which was acquired by Sony Ericsson from Symbian Ltd. earlier in the year. The transaction was ratified by the appropriate competition authorities during the quarter.

Sony Ericsson announced a number of new products during the quarter including high-end W890 Walkman® and the K630 and the K660 HSDPA web phones. The company also announced its strategy to expand Sony Ericsson’s PlayNow™ digital content distribution application into a full service proposition during 2008.

On November 1, 2007 Sony Ericsson’s president Miles Flint stepped down and Hideki ‘Dick’ Komiyama joined the company to replace him. Dick Komiyama joined Sony Ericsson from Sony Corporation where he was Director, Chairman, Sony Electronics Inc., USA, and Executive Vice President of Electronics Marketing and Sales Strategies of Sony Corporation, Japan.