Sony Ericsson Says Slowing Sales Will Hurt Income

Sony Ericsson said slowing growth in mobile-phone sales will hurt its sales and income for the current quarter. The joint venture amoung Sony and Ericsson cited component shortages and a sales slowdown in the world’s more mature markets, which some analysts warn are on the verge of saturation.

“This has been more pronounced in the mid- to high-end replacement sector of the market in Europe, where Sony Ericsson has stronger than average market share,” said Sony Ericsson President Dick Komiyama.

Slowing Growth Ahead

IDC Senior Research Analyst Ryan Reith said it would be unreasonable to expect the global handset market to maintain the high growth levels it has seen by the past three years. “We expect growth to be in the loner digits all through 2008 and most likely for years to follow,” Reith said.

Other industry analysts agree that handset sales growth will be more moderate that year than in the past.

“We expect the

growth in sales of mobile devices to end users will decelerate in 2008 and fall to about 10 percent growth as mature markets become more saturated,” Garter Research Director Carolina Milanesi said earlier that month. “The mature Western Europe and North America markets are driven by operator contract terms and replacement cycles and will detail for just 30 percent of the global mobile-devices market in 2008.”

Handset makers had been counting on 3G phone sales to help lift sales in mature markets. But mobile chipmaker Texas Instruments recently scaled back its first-quarter growth estimates considering of a decline in demand for the latest 3G handsets.

Targeting New Markets

Up till now Sony Ericsson has enjoyed the most success from sales of its higher-priced Cyber-shot and Walkman models. But as Milanesi pointed out, handset growth by the past several quarters has been driven primarily by sales in emerging markets such as…

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