Sony Ericsson gains market share, boosts profits

Sony Ericsson was another handset maker that gained on Motorola’s losses in the first quarter, reporting today its shipped 21.8 million handsets in the first three months of the year and increased its market share 2%.

The company also continued its impressive financial growth, posting a Euro 254 million (U.S. $346 million) quarterly profit, up 133% from the same quarter last year, off of Euro 2.93 billion (U.S. $3.98 billion) in sales, a billion Euro increase. Despite the gains though, Sony Ericsson missed analysts estimates for both revenues and pre-tax profits, which sent Ericsson shares sliding in Stockholm. The announcement came out after the close of the Japanese markets where the vendor’s other corporate owner Sony is based.

Sales were led by its Walkman digital music phones and Cybershot camera phones, both higher-priced feature phone lines that contributed to Sony Ericsson’s high average selling price per device. While Sony Ericsson’s selling price averages 134 Euros ($U.S. 182), about 50% higher than sales-volume leader Nokia, Sony Ericsson is still experience the downward pressure on phone prices in the market. It’s phones fell from an average price of 146 Euros in the holiday 4^th quarter by 12 Euros, driven by sales of cheaper phone lines. Just as Sony Ericsson’s phones are scaling down into the mass market, Nokia’s are scaling up. On Thursday it announced that sales in its Multimedia division, which produces the sleek high-end Nseries line, increased 28% year-over-year in the first quarter to Euro 2.25 billion.

That resulted in a market share of over 8%, Sony Ericsson estimated up 2% from the the 1^st quarter of 2006, but it was slightly lower than the 4^th quarter, in which the company estimated a 9% market share. Sony Ericsson is fairly secure now in the number four slot among handset makers, with Nokia, Motorola and Samsung ahead of it. There are some seismic shifts going on the market though as Motorola’s breakneck climb through the market has been reversed in the last few quarters. Moto’s estimated global marketshare dropped to 17.5% in the last quarter, down from the 23.3% in the previous quarter.

Samsung, which reported its Q1 results last week, shipped 34.8 million handsets in the first quarter, up nearly 30% from a year earlier. That gives Samsung a roughly 13% market share closing the gap between itself and Motorola. Fellow Korean company LG Electronics today reported handset shipments of 15.8 million units, up from 14.1 million units a year ago.