Sony Ericsson, a well known mobile arm of the Japanese company Sony Corp and Swedish Ericsson, posted its first profit in years, following a cost-cutting measure and introduction of new phones to the market, including the XPERIA X10 - its first Android based device.
Profits for Q1 2010 were EUR21 mil, compared to a loss of EUR293 mil a year ago.
In mid-2008, Sony Ericsson started a transformation program with the aim of reducing annual operating expenses by EUR880 mil. It is continuing with the full benefit expected during the second half of 2010. Since the start of the program, Sony Ericsson has laid off approximately 3,150 people to reach a total of 8,450 by March 31, 2010.
Bert Nordberg, Sony Ericsson's president has this to say:
"We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company's results.
The Xperia(TM) X10, our first android-based Communication Entertainment device featuring signature Sony Ericsson applications Timescape and Mediascape(TM), and Vivaz(TM), a beautifully designed, touch-screen Symbian phone started shipping towards the end of the quarter.
Both models have been well received by global customers.
Increases in both gross and operating margins show that we are on the right track to build the correct cost structure for our business organization and strategy. We will continue to work through the transformation programme to ensure that we are competitive."
Analyst Greger Johansson at Redeye stated that Sony Ericsson's swing to profits is likely to be sustainable but continuing loss of market share is increasingly turning the company into a nice player.
As for me, I say Sony Ericsson better step it up a notch - a big notch, and do it quick. Their single Android offering would have been nice at the time of its announcement 5 months ago but is already kind of late to the market after being released this past week. And to top it all off, it's running an antiquated 1.6 version of Android.