Sony Ericsson edges ahead of Samsung

Sony Ericsson, the mobile phone maker, has made progress towards its goal of becoming the industry’s number three manufacturer by generating more revenue than Samsung Electronics during the final quarter of 2006.

The joint venture between Japan’s Sony and Sweden’s Ericsson yesterday reported sales of €3.8bn ($4.9bn) during the three months to December 31, up 64 per cent on the same period last year.

Samsung, the number three maker after Finland’s Nokia and Motorola of the US, last week said its mobile phone business had had sales of Won4,310bn ($4.7bn) in the fourth quarter, down 7 per cent year on year.

Sony Ericsson leapfrogged LG Electronics to become the industry’s number four during 2006. Miles Flint, president of Sony Ericsson, hailed 2006 as an “extraordinary year” for the joint venture, which was established in October 2001.

The venture ran up losses in its first two years, and its turnround was founded on the introduction of mobile phones with integrated cameras and music players, some of which use Sony’s Walkman brand.

Sony Ericsson set itself a target last October of becoming the industry’s number three within five years, but Mr Flint declined to say yesterday when he expected it to overtake Samsung’s annual sales by value or volume.

Samsung sold 32m phones in its fourth quarter, compared with Sony Ericsson’s 26m.

Sony Ericsson’s revenue is greater than Samsung’s because the average selling price of its handsets to mobile operators such as Orange is higher.

Sony Ericsson recorded sales of €11bn for 2006, up 51 per cent on 2005. Pre-tax profit for 2006 was €1.3bn, up 160 per cent.

The joint venture’s pre- tax profit for the fourth quarter of 2006 was €502m, up 144 per cent year on year.

Motorola, the number two manufacturer, warned earlier this month that sales and earnings would be lower than it expected in the fourth quarter.

Nokia, the industry’s number one, in November lowered its profit targets for the next two years.

Sony Ericsson sold 60m music enabled phones in 2006, including 17m Walkman devices, underlining how its products are more popular than Apple’s iPod. Apple sold 39m iPods in its 2006 fiscal year, which ended on September 30.