Sony Ericsson Mobile Communications barely broke even during the third quarter, and reported a small year-on-year drop in revenue as an increase in the average selling price of its phones was offset by a 9 percent fall in volume.
Revenue for the third quarter was about €1.59 billion (US$2.19 billion), compared to €1.6 billion a year earlier. Profitability declined too, with the company breaking even this year after making a €49 million profit in the third quarter last year.
Sony Ericsson shipped 9.5 million phones during the third quarter, a 9 percent decrease compared to the same period last year due to a decline in feature phone shipments. The drop was in part offset by an increase in smartphone shipments, the company said.
That change in product mix towards higher-end models drove the average selling price of Sony Ericsson phones in the quarter up to €166, from €154 a year earlier.
Sony Ericsson plans to drop feature phones from its portfolio entirely during 2012: Currently, 80 percent of its revenue is from smartphones. The company has shipped 22 million Xperia smartphones to date. It estimates that its share of the Android-based smartphone market was approximately 12 percent in volume and 11 percent in value during the third quarter.
So far, Sony Ericsson has managed to stay out of the patent battles that Google itself and other vendors of Android-based devices are embroiled in. During a conference call to discuss the results, CEO Bert Nordberg said the company considers itself "patent safe", as it is armed with nearly 7,000 patents of its own, and over 60,000 patents owned by parent companies Sony and Ericsson.
A number of phone vendors, including HTC and Samsung, have signed patent deals with Microsoft regarding Android. When asked if Sony Ericsson had a similar deal, Nordberg said he can't confirm if an agreement is in place or not.
On the subject of the company's relations with Microsoft, Sony Ericsson continues to say that Android is currently the best choice mobile operating system, but the company isn't closing the door on Windows Phone or Windows 8. Currently, Windows Phone needs more applications and services for it to be an alternative, according to Nordberg, who also thinks that what he has seen of Windows 8 on tablets "looks interesting." Sony Ericsson does not sell any tablet computer, although Sony sells Android tablets.
Sony Ericsson also continues to stay mum on rumors that Sony may buy out its partner in the joint venture, Ericsson. During the conference call the company declined to comment
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