Sony Ericsson breaks even as European sales dip

Mobile phone manufacturer Sony Ericsson on Friday said it broke even in the third quarter due to a declining sales environment in Europe.

Sony Ericsson breaks even as European sales dip

The Japanese-Swedish group, now the sixth-biggest player in the global market, said that in the three months to September it made no profit, down from a €49 million ($67 million) net profit during the same period last year.

The company’s third quarter sales fell one percent from last year to €1.58 billion and units sold fell 9.0 percent to 9.5 million units with a dip in classic mobile phone sales only partially offset by smartphone sales.

Sony Ericsson chief executive Bert Nordberg said that Android-based smart phones now accounted for more than 80 percent of sales and that the company was “shifting the entire portfolio to smartphones during 2012”.

Nordberg told TT news agency that there were clear signs that the European market was in decline.

“For Sony Ericsson, which has always been strong in western Europe, that means that we need to invest a lot in marketing in Asia. We’ve done that, and it’s gone well,” he told TT.

“We also must get sales going in other parts of the world that don’t have a debt crisis at the moment…you can’t just site and wait for things to get solved in Europe, since no one knows when that will happen.”

Nordberg also refused to comment on reports last week that Japan’s Sony was looking to buy out Sweden’s Ericsson for full control of the company.

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Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.