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Sony Ericsson vows to cement top-three place

Q4 shipments leave it chasing Samsung with multi-featured handset portfolio.

Handset vendor Sony Ericsson topped off an impressive year by shipping over 26 million units in the final quarter of 2006, up 61.5% from the same period in 2005, moving the company within striking distance of second placed Samsung Mobile.

Sony Ericsson enjoyed 15% growth in the second, third and fourth quarters of 2006. The figures also represent a 46.4% full-year growth in terms of unit shipments between 2005 and 2006.

The company reported pre-tax revenues of US$4.9 billion for 2006 and a net income of US$580 million in Q4, 2006. The company cited that “higher than expected” demand for its premium Cyber-shot and Walkman-enabled devices fuelled the rampant results.

“During the fourth quarter of 2006 Sony Ericsson finished a strong year with record volumes, sales and net income due to the soaring popularity of our portfolio of imaging and music phones,” declared Sony Ericsson’s president Miles Flint. “Our target is to become one of the top three players in the industry, and the momentum we established in 2006 makes this an achievable ambition,” he added.

A report conducted by research firm iSuppli echoed these claims, noting that: “Samsung must watch its back because Sony Ericsson is gaining on it”.

The report also confirms that Sony Ericsson’s unit shipments in Q4 2006 reached 26 million units compared to Samsung’s 31.9 million units for the same period.

Other media reports suggest that Sony Ericsson’s global market share stood at 8.7% in Q4 2006, ranking it fourth in terms of unit shipments. Positioned above it was Samsung Mobile on 10.7%, Motorola on 21.9% and Finnish handset giant Nokia topping the market with a 35.2% market share.

Sony Ericsson also reported a favourable response among consumers for its mid-tier products in the emerging markets of Asia Pacific, Europe and Latin America.

The company hailed the results as a triumph for its marketing campaign of positioning mid-tier products into emerging markets “without undermining profitability”. This stands in stark contrast to US-based handset vendor Motorola, which attributed its disappointing Q4 2006 financial performance to “an unfavourable geographical and product-tier mix of sales”.

Meanwhile, the company recently announced its intentions to start production of low-cost music-enabled handsets sourced from India by tying-up with local channel agents Flextronics and Foxconn. “Local manufacturing in India will result in improved cost efficiencies and enable us to offer attractive products at even more competitive prices,” claimed Flint.

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