Sony Ericsson continues to invest for future growth



Q1 Highlights:

  * Year-on-year volume growth of 2%
  * Income before taxes at higher end of forecast
  * R&D investment continues to expand portfolio and addressable
    market
  * New sub-brand XPERIA(TM) added to portfolio

The consolidated financial summary for Sony Ericsson Mobile
Communications AB (Sony Ericsson) for the first quarter ended March
31, 2008 is as follows:
 

                                    Q1 2007   Q4 2007   Q1 2008
Number of units shipped (million)      21.8      30.8      22.3
Sales (Euro m.)                       2,925     3,771     2,702
Gross margin (%)                      30.3%     31.8%     29.2%
Operating income (Euro m.)              346       489       181
Operating income (%)                  11.8%     13.0%      6.7%
Income before taxes (Euro m.)           362       501       193
Net income (Euro m.)                    254       373       133
                                                               
Average sales price (Euro)              134       123       121

 
 
Units shipped  in  the  quarter  were 22.3  million,  a  2%  increase
compared to the same period last year and in line with our March  19,
2008 interim announcement of 22 million units. Sales for the  quarter
were Euro  2,702 million,  a decrease  of 8%  on a  year ago  due  to
slowing market growth in mid-to-high end phones in markets where Sony
Ericsson has a strong presence. Gross margin was one percentage point
lower than Q1 2007, reflecting a less favourable product mix.  Income
before taxes for the quarter was  Euro 193 million, which was at  the
higher end of the range (Euro 150-200 million) we announced on  March
19, 2008.  This represented  a decrease of 47%  compared with a  year
ago, due to  higher R&D  investments as  a percentage  of sales,  and
reflecting that Q1 2007 was  a particularly strong first quarter  for
the company.  Net income for the  quarter was 48% lower, at Euro  133
million.
 "Sony Ericsson continues to invest in expanding its product portfolio
to appeal to a  wider variety of consumers  in both new and  existing
markets," said Dick Komiyama, President, Sony Ericsson. "Our  product
announcements during the first quarter have been well received by the
industry,  and  we  expect  to  see  a  positive  effect  from  these
announcements during the second half of 2008."
 
During the quarter, Sony Ericsson added a new sub-brand to its
product portfolio with the announcement of the XPERIA(TM) X1, a
high-end multi-media convergence phone based on Windows Mobile®,
which will launch in the second half of the year.  In addition, the
company announced a number of new phones during the quarter to
increase the appeal of its brand to a broader audience.  These
included new high-end Walkman® and HSDPA web phones, such as the
W980, W760, Z770 models and also added to its cutting-edge
Cyber-shot(TM) range with models such as the C702 and C902.  
 
Average selling price (ASP) decreased both sequentially and
year-on-year due to the impact of softer sales of high-to-mid end
models in key markets. Market share for the quarter is estimated to
be around 8%, down one percentage point sequentially.
 
Sony Ericsson made a dividend payment of Euro 470 million during  the
quarter to the parent companies.   A second dividend payment will  be
made this year. 
 
Sony Ericsson forecasts that the global handset market for 2008  will
grow at a  rate of around  10% from  more than 1.1  billion units  in
2007. The  majority of  this growth  is expected  to be  in  emerging
markets.
 
XPERIA(TM) is a trademark of Sony Ericsson Mobile Communications
WALKMAN® and Cyber-shot(TM) are trademarks or registered trademarks
of Sony Corporation.
Microsoft and Windows Mobile® are trademarks of Microsoft Corporation
 
EDITOR'S NOTES:
 
Financial statements and additional information:
 
Financial statements:
 
Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
 
Additional information:
 
Net sales by market area by quarter
 
- ENDS -
 
Having sold  over  100  million  phones in  2007,  Sony  Ericsson  is
currently one of the five  largest mobile phone manufacturers in  the
world.  An important industry player operating in over 80  countries,
our phones, accessories and PC  cards are synonymous with  innovation
and style.  With R&D sites in  Europe, Japan, China, India and  North
America, diversity is one of the core strengths of the company.  Sony
Ericsson was  established  as  a  50:50 joint  venture  by  Sony  and
Ericsson in October 2001, with global corporate functions located  in
London.  For  more  information  about  Sony  Ericsson  please  visit
www.sonyericsson.com
                           
CONTACTS:
 
Investors / Analysts
Ericsson investor relations                                        
Gary Pinkham (Stockholm) +46 8 719 0858                  
 
Sony investor
relations                                                                       
        
Shinji Tomita (London) +44 20 7444 9713
Tatsuyuki Sonoda (Tokyo) +81 3 6748 2180    
 
Press / Media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Merran Wrigley (London) +44 20 8762 5862
 
This press release contains  forward-looking statements that  involve
inherent  risks  and  uncertainties.   We  have  identified   certain
important factors that may cause actual results to differ  materially
from those  contained  in  such  forward-looking  statements.  For  a
detailed description  of  risk  factors  see  Sony's  and  Ericsson's
filings with the US Securities and Exchange Commission,  particularly
each company's latest published Annual Report on Form 20-F.
 
The full report (including tables) can be downloaded from the
following link:

Attachments

First quarter report 2008