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Sony Ericsson hit by supply chain woes

As expected, the second quarter was rough for Japanese electronics companies. Mobile handset leader Sony Ericsson was hit hard by the Japan disaster, a...

Freddie Pierce
|Jul 15|magazine5 min read

As expected, the second quarter was rough for Japanese electronics companies.

Mobile handset leader Sony Ericsson was hit hard by the Japan disaster, as problems in the company’s supply chain caused a second-quarter net loss.

“We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter,” Sony Ericsson Chief Executive Bert Nordberg told the Wall Street Journal.

Disruptions in the company’s supply chain forced a delay of the launch o the Xperia Neo Phone until the third quarter, as revenue also fell to €1.19 billion.

Thanks to the supply chain shortages, shipments also fell in the second quarter, as Sony Ericsson shipped 7.6 million units during the quarter, a 31 percent decrease from last year.

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There was a bit of good news for consumers, however, as the average price of a Sony Ericsson handset fell from €160 to €156.

Despite the supply chain shortages, Sony Ericsson plans to continue its push in the Smartphone department.

“Our shift to Android-based Smartphones continues with Smartphone sales accounting for more than 70 percent of our total sales during the quarter,” Nordberg said.

The company estimated that its global Smartphone market share was approximately 11 percent by both volume and value.