The Wall Street Journal-20080117-Sony Ericsson Aims for U-S-- New CEO Komiyama Calls Presence -Weak-- Net Income Slumps 17-
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Sony Ericsson Aims for U.S.; New CEO Komiyama Calls Presence 'Weak'; Net Income Slumps 17%
While fourth-quarter net profit fell, cellphone maker Sony Ericsson said it is proceeding with plans to expand in the U.S., among the world's largest cellphone markets and one where the company's presence hasn't been as big as it is elsewhere.
Sony Ericsson, the world's fourth-largest phone maker by market share and a joint-venture of Japan's Sony Corp. and Sweden's Telefon AB L.M. Ericsson, said net profit fell 17% to 373 million euros ($553 million) from 447 million euros a year earlier. Higher operating costs as well as a lower tax rate in the year-earlier quarter made for tough comparisons, the Lund, Sweden, company said.
New Chief Executive Hideki "Dick" Komiyama said in an interview that he planned to step up efforts to improve Sony Ericsson's U.S. presence. "In the largest market, the U.S., our position is weak," said Mr. Komiyama, who joined Sony Ericsson in November from Sony Electronics Inc. in the U.S., where he was chairman.
The company is strengthening its relationships with North American operators, as well as increasing distribution, supply chain and marketing, Mr. Komiyama said. He also said Sony Ericsson is broadening the range of phones it sells to appeal better to U.S. consumers. For example, the company is adding more phones capable of high-speed wireless connections and clamshell-shaped phones, which are popular in North America.
The company said that it expected the global mobile-phone market to grow by 10% in 2008 but warned that business may be tough because of economic turbulence. That growth level would be similar to 2007's, according to Ben Wood, an analyst at research-and-consulting firm CCS Insight Ltd., based in Solihull, England.
The company is watching closely for "how and if and when it will influence consumer behavior and retail," Executive Vice President Anders Runevad said.
Sony Ericsson's fourth-quarter revenue remained relatively flat from a year earlier at 3.77 billion euros. The company said Asian sales slid 18% because of difficult markets in Japan and China. Political unrest in Pakistan also hurt sales in the region.
The company is expanding operations to make less costly, simpler handsets for emerging markets such as India, China and Brazil. That helped in the fourth quarter to sell 30.8 million phones, up 18% from a year earlier. Costs rose 16% to 724 million euros from 623 million euros.
Sony Ericsson said its global market share increased by about 2% to slightly over 9% during 2007, with gains particularly in Eastern and Western Europe and the Americas. It benefited from sales of camera and Walkman phones.
