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Hard on the heels of Motorola's accelerated restructuring announcements, Sony Ericsson and Samsung are also adjusting to the downturn, the former squeezing its product roadmap as it announces a fourth quarter loss; the latter consolidating four key divisions, including cellphones, into just two.

Sony Ericsson reported a Q4 loss of €187m ($245m) caused by lower handset sales and reduced margins, reversing a profit of €373m a year earlier. For the full year, the Sino-Swedish venture reported a full year loss of €73m ($96m), compared to a profit of €1.1bn ($1.45bn) in 2007. Sales for the fourth quarter were €2.9bn ($3.8bn), down 23% year-on-year.

Gross profit margins slumped from 31% in 2007 to 22% in 2008, and was just 15% in the fourth quarter. Sony Ericsson shipped 24.2m units in the quarter, down 6% on Q3 - despite the seasonal uptick usual in the last quarter - and 21% year-on-year. Average selling price was actually up on the third quarter, reflecting SE's strategy of defocusing on plans to increase volume in low end markets, and concentrate, during the downturn, on its usual heartland of high end smartphones. However, fourth quarter ASP did fall year-on-year, to €121 ($159). The sequential increase was also influenced by exchange rate fluctuations. SE maintained its market share of about 8%, narrowly ahead of LG.

President Dick Komiyama said in a statement: "Our business alignment is progressing as planned, with the full effect of annual savings of around €300m expected by the second half of 2009. We foresee a continued deterioration in the market place in 2009, particularly in the first half." The cost reduction program aims to make savings of €180m ($237m) a year.

Over at Samsung, the company is looking at streamlined structures, pared-down cost structures, lower device prices and higher market share to get through the decline. It has decided to consolidate four business units - semiconductors, liquid crystal displays, mobile phones and televisions - into just two major divisions. Samsung Electronics' CEO Lee Yoon-woo will take on the added responsibilities of overseeing the combined semiconductor and LCD businesses, now called Device Solutions.

The other unit will be called Digital Media and Communications, to be headed by Choi Gee-sung, and uniting televisions and cellphones. This new structure is designed to reduce overheads and leverage channels and supply chains more effectively, but longer term, also reflects the increasing crossover between Samsung's various digital media activities.

Samsung is the world leader in memory chips, LCDs and flat screen televisions and second in cellphones but is seeing falling prices in all its businesses, and these will worsen as it pursues a policy of using the downturn to boost its market share, harnessing its scale to cut prices aggressively on many devices. Its net profit already fell 44% year-on-year in Q3 of last year, and it will report fourth quarter earnings next week.

Samsung will also cut the salaries of top executives by 20% this year.

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