PSP World

Sony Ericsson Reports Profit On Smart Mobile Phones

Sales of Sony's handheld PSP game system may have recently flattened off, but the company is experiencing surprising growth in the mobile smartphone market. Perhaps, as we have already speculated, this trend is indicative of an eventual fusion between the mobile phone and portable gaming divisions at Sony.

Last year Sony Ericsson reported a net loss of 836m euros, as the global economic recession cut demand for expensive mobile handsets in 2009. But in the first quarter of 2010, the company has experienced surprising growth. Net profit this past quarter came in at 21m euros ($28 million USD), compared with a loss of 293m euros a year earlier.

The unexpected profit came despite the total number of units sold being 28% lower from a year ago at only 10.5 million phones. But new, more expensive and feature rich phones such as the Xperia X10 and Vivaz handsets have helped propel the company to profitability. Improved margins and cost-cutting also helped to improve profitability.

"We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company's results," said Bert Nordberg, president of Sony Ericsson.

Sony Ericsson has been caught off guard somewhat by the switch to smartphones - the one area of the market where sales have been growing. But we can expect the company to invest significant resources in this market segment going forward as consumers adopt these more capable mobile devices. Gaming and entertainment functionality may be next on the drawing board as Sony seeks to capitalize on its Playstation Portable and Playstation Network brands in the mobile space.

The Xperia X10 handset helped drive profit in the first three months of 2010.