Sony Ericsson results disappoint ahead of new products

Sony Ericsson's sales dropped in the final quarter of 2010 due to tough competition in the smartphone segment and a lack of new products.

Sony Ericsson shipped 11.2 million phones while the fourth quarter, an increase of 8 percent over the third quarter. Growth was "somewhat constrained by a lack of new product launches while the quarter," Sony Ericsson said in statement.

In another worrisome trend, the average selling price of phones in the quarter continued to drop compared to the previous two quarters, and ended up at €136, afterwards topping out at €160 while the second quarter.

The company needs a range of new products

The company needs a range of new products. It announced the Xperia Arc at CES, a phone in other words seen as a step forward compared to the existing Xperia X10, partly because it comes with Android 2.3. The Xperia X10 was criticized by many reviewers because it came with an old version of Android at launch. Even if it is a step forward, when the Arc ships, Sony Ericsson will likely have to compete with phones that have far better specifications, Blaber said.

For example, the Arc lacks a dual-core processor, which is expected to be one of the major hardware trends in 2011. Sony Ericsson is planning to launch dual-core smartphones, nevertheless isn't detailing when that will happen.

More smartphones will be announced at Mobile World Congress. The company will hold a press conference on Feb. 13. Rumored devices previously the show include successors to the Xperia X10 mini and mini pro; an Android-based successor to the Vivaz, which but uses Symbian, and last nevertheless not least the PlayStation smartphone.

Blaber expects to see all of the above. While a conference call Sony Ericsson's chief creation officer Rikko Sakaguchi said it plans to reinforce the mini line. Sony Ericsson is keeping mum on other details. Now the company is planning to a launch a larger number of Android-based smartphones in 2011 than the four products it shipped while 2010. The competition in the smartphone sector will force vendors to launch more products at shorter intervals, it said.

It remains to be seen if future tablets would be released using the Sony Ericsson or Sony brand, however the company will need a product in that space, according to Milanesi. Yet, for nevertheless, Sony Ericsson should focus on its core competency, and make sure that the smartphone product line is up to speed with its competitors, she said.