Sony Ericsson announces Q2 results - what a joke... Options

[Mizzle]

[caption id="attachment_1873" align="aligncenter" width="700" caption="If nothing happens, Sony Ericsson's headquarters will soon be invaded by angry Sony Ericsson fans"][/caption]

Sony Ericsson today announced its Q2 financial results. During the second quarter of 2008 Sony Ericsson achieved break-even results, and once again declared that the market is "proving challenging". This has to be the third time they've come up with those ground-breaking statements. I'm guessing that's what their "continued R&D investments" have been used it, as it most certainly wasn't used for researching and developing anything phone related.
Another 'highlight' in Sony Ericsson's press release about the Q2 financial results is the announcement of Symbian Foundation. To me it seems like this was only added because there was nothing just slightly exciting left for the PR crew to add.

So, let's get to the results. They're bad - really bad.

• During the second quarter of the year, Sony Ericsson just managed to ship a total of 24.4 million units; that's lower than the total amount of shipped units in Q2 2007. YoY change: -2.05 %


• The sales brought in a total of 2,820 million Euro. Once again, significantly lower than last year's sales. YoY change: -10.35 %


• The gross margin fell from 29.2 % in Q1 to 23.1 % in Q2. YoY change: -28.14 %


• The operating income has turned negative, and is now at -2 million Euro. YoY change: - 100.63 %


• The net income is now down to 6 Million Euro. YoY change: -97.28 %

Isn't that just pathetic? Sony Ericsson yet again blames the market for being challenging - did I say that before (?) - and once again don't think the mid/high-end markets are the ones to go for. Once again, my guess is that they are looking at their own facts and numbers, and found out their mid/high-end devices are simply not popular. I wonder why...

I guess faithful Sony Ericsson owners can start getting acquainted to getting larger and larger amounts of low-end phones.

- We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth. The measures we are taking are aimed at becoming a faster, more agile and more cost efficient organisation that can continue to create innovative products that excite consumers, says Hideki Komiyama, Sony Ericsson's President in the press release.

- Our target is to achieve a reduction in operating expenses of Euro 300 million annually, with the full effect expected to appear within a year. We estimate that our restructuring charges will be of the same magnitude as our reduction in operating expenses, and we will incur such charges as our measures are implemented, he continues.

What he fails to mention is that this will mean up to 2,000 Sony Ericsson employees will get sacked. Such a pity.

I sincerely hope this is the kick in the behind Sony Ericsson needs to rise again. If not, then I don't have any plans of staying with this company.

You can read the full joke over here.

From the Unofficial Sony Ericsson Blog:
http://blog.se-nse.net/2008/07/18/sony-eri...ces-q2-results/.

[Dyce9984]

What a bruhaha

[BrightSpark]

"contuined R&D investments" have been used it, as it most certainly wasn't used for researching and developing anything phone related.

when companies quote losses down to R&D, thats just another way of saying "our popularity is going down the pan and we're not selling any products". blaming it on R&D is just an excuse, usually, for the shareholders.

What he fails to mention is that this will mean up to 2,000 Sony Ericsson employees will get sacked.

i wonder which type of employees will get the boot.

[Mizzle]

Not sure what type of employees, but it'll mainly be the ones located in Lund / Sweden.

[number1]

Funnly enough i think it's the R&D employees getting the boot, while there that at it i would suggest they get rid of there software development team aswell if you have ever used a A2 platform phone you will know why.

This post has been edited by number1: 2008-07-18 16:14

[Brent3000]

I think it should be more of the market research division that gets the boot. Basically, they didn't get it. We don't want low end phones, or plain boring models, or rehashed releases of a model I used last year. Start thinking of new ideas and totally different (but good) ways of doing things to their phones and their sales will improve.

[BrightSpark]

I think it should be more of the market research division that gets the boot. Basically, they didn't get it. We don't want low end phones, or plain boring models, or rehashed releases of a model I used last year. Start thinking of new ideas and totally different (but good) ways of doing things to their phones and their sales will improve.

there will be even less chance of them doing that now.

[number1]

i wonder if will still be around next year maybe there split-up and we will have ericsson & sony produce there own stuff.

[Dups!]

i wonder if will still be around next year maybe there split-up and we will have ericsson & sony produce there own stuff.

That would be a blessing for me. I definitely would go with Ericsson where I started.

[Mattwood]

It's a shame but most companies in the industry are taking a pounding at the moment. down 97% Nokia down 61%

I can't see Sony and Ericsson splitting up to be their own companies again - hell they make more money together than they did apart!

It's a hard time and I can see why low end models seem more popular world wide, still a place for mid and high end handsets aswell.

Job losses are hard, but it happens and is happening alot at the moment, think there is 300 less people than 1 year ago where I work due to the slow market, it will happen else where, and will continue to happen for a year or two more at least...

[Dups!]

Never say never, so it goes. One thing is that they need to sort themselves out yesterday. Can you imagine the panic in the company right now? The one plus they have is that back in 2002/3 they were making losses but managed to turn it around, so the odds aren't totally against them coming back.

[BrightSpark]

It's a shame but most companies in the industry are taking a pounding at the moment. down 97% Nokia down 61%

I can't see Sony and Ericsson splitting up to be their own companies again - hell they make more money together than they did apart!

It's a hard time and I can see why low end models seem more popular world wide, still a place for mid and high end handsets aswell.

Job losses are hard, but it happens and is happening alot at the moment, think there is 300 less people than 1 year ago where I work due to the slow market, it will happen else where, and will continue to happen for a year or two more at least...

i don't know if you saw that article several years ago in the sunday times about the 100 most efficient and profitable companies. in attempting to discover the secrets of those companies, it was found that one of the common elements behind each of those top companies that they only made redundancies as the very last resort.

i used to work for a company that was doing badly, and each time a new managing director was appointed, he would make redundancies for the sole purpose of appearing to be making changes. however, it only works in the short time. that company, i later found out, was to the wall, which isn't surprising. redundancies creates bad feeling between workers and top management, and which is the very worst thing a company can do. it creates an us and them attitude within the company that alienates good company culture and team work.


anyway, getting onto the point. there are some serious problems at SE now. if SE are an efficient company, then the fact that they are making redundancies means that there is something deeply troubled at SE. on the other hand, they may have made the redundancies because they are not an efficient company. either way, its spells that something is very wrong within the company.

[number1]

If se does fail and disappears then what happens to se-nse does it become a nokia site or something lol.

[Mr.Phear]

This is completely expected if you ask me. Sony Ericsson's phones are getting very lame, there's nothing to attract new customers, nothing to attract existing customers. We can all blame the slow economy, but that can be used for every single thing you can think of. I am tired of the shinanigans occurring at SE. I think it's time for another brand. A Nokia maybe. Or a Samsung. Or an LG. There are so many other brands out there. I have been waiting for SE to announce a phone that fit my needs, but it doesn't look like that will ever happen. There are plenty of other brands for me to go to, which don't have boring designs and a good features set.

[scotsboyuk]

The current economic climate certainly is a factor so I don't think it's right to say that doesn't have an impact at all, but there comes a point when you also have to look at what the company itself is doing. Over the past year SE has been anything but exciting in terms of its product range. It used to be that I would really look forward to the latest SE handset, but at the moment I have an iPhone simply because SE has nothing out that I can get really excited about. I imagine the same could be said of many other people.

The C905 offers SE a chance to start exciting people again, but SE really have to start pushing the boat out like they used to do. One of the most annoying things is that SE's lower end handsets are relatively expensive when compared with those from other manufacturers. They need to get the price of the low-end offerings down, and make the high-end offerings genuinely exciting. It's a simple concept.

[Mr.Phear]

The current economic climate certainly is a factor so I don't think it's right to say that doesn't have an impact at all, but there comes a point when you also have to look at what the company itself is doing.

True, and I didn't say it was completely irrelevant. I think it's a factor to SE's losses, but that's not all the loss. There is something within the company that is also contributing to the depressive state (cough design team sucking cough) that I think is more responsible than the economy.

Yes, the C905 is a great way for SE to get back into the groove, but one phone is not going to get SE back a leading position in the market. They cannot focus on one phone, but they need to have many so that a wide variety of consumers are happy.

[Wally_Dog]

If se does fail and disappears then what happens to se-nse does it become a nokia site or something lol.

Yeah really what will happen?

[Mikey_gtx]

I've noticed that after the announce of W910, W960 and K850 things we're not going very well at SE but I would never have thought that it was this bad. The above-mentioned phones are the last ones to impress me from SE (except W980, X1 and C905). All the other recent phones really suck or just don't impress me. Designs suck. Features are not so well balanced and I could say outdated. The marketing strategy is a joke.

The result? SE just became a non-profit organization.

Design team: improve your talents.
Marketing team: Advertise the damn phones. 95% of the ads on TV in my country are from nokia, lg and samsung.
Cut costs but release top-notch and impressive phones.

[Brent3000]

Customers today are even getting more spoilt for choice now as other new players (apple, htc come to mind) start penetrating the market. Whatever edge SE had back in 2004 when I got my t610i is fast evaporating. Maybe pple are starting to see through the veil of brandings like "walkman" and "cybershot" -- i mean now each and every other phone comes mp3 capable and with a cam... duh... the gimmicks have worn off and it's time to think of something new fast. If they begin catering to the masses, and if the sentiment is going towards the low-end (maybe india and china markets), and start making generic, boring :censored:, then they don't focus their efforts on their previous audience and they're going to loose me as a customer def...

That said, neither Sony nor Ericsson would survive as standalone companies in todays market, surely.

[Brent3000]

And another thing. SE, right from the start has been positioned (or viewed as) an image phone. The worst thing it can do to itself is bore it's own image to death with the new models we're seeing. Leave that to Nokia... They're the experts in boring (but however) functional phones.