Sony Ericsson expects to hit profit in second half

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Sony Ericsson expects to hit profit in second half

By CAROLINE GABRIEL

Published: 11 March, 2009

READ MORE: Ericsson | Sony Ericsson

While the big two phonemakers, Nokia and Samsung, are tightlipped about timescales for market bounceback - despite analyst forecasts of a third quarter uptick - smaller rivals are more public in their optimism. HTC believes its sales bottomed out in February, and Sony Ericsson is also looking for some signs of recovery by mid-year, and expects to return to profit during the second half of 2009.

Sony Ericsson said it expected the handset market to shrink by 5%, in unit terms, this year, but that it aimed to get back in the black by year end, and enter the top three vendors in 2011.

Hirokazu Ishizuka, head of Sony Ericsson in Asia-Pacific, reiterated the profitability targets as the struggling handset maker launched in Korea, a market that is opening up to outside vendors, following the removal of government insistence that all smartphones should support the Korean mobile internet platform, WIPI. This rule had deterred many western suppliers, since they would have to create special handsets just for this saturated market, where locals Samsung and LG hold so much power, and also potentially share intellectual property secrets with Korean agencies.

Sony Ericsson (SEMC) and Nokia were also excluded from Korea before because it was a CDMA zone, but SKT has been expanding its W-CDMA 3G coverage rapidly, and will work with SEMC to launch the Xperia X1 Windows Mobile touchscreen smartphone. This will come preloaded with the full version of the Spiderman 3 movie to try to stand out from the Samsung and LG crowd among Korean consumers, some of the most demanding in the world in terms of mobile web services and content. SEMC has localized some of the X1's application panels, which offer quick access to services from the homescreen, adding the Korean Daun portal and SKT's mail and web offerings.

Analysts are skeptical - Lee Nam-ryung, an analyst with HMC Investment Securities, told Dow Jones: "Unless the price of the phones is significantly lower than other Korea-made products, it will be hard for the company to get a big share of the local market as was proven by Nokia and Motorola."