Sony Ericsson sees higher demand for handsets

Sony Ericsson followed rival Nokia by raising its forecast for the global mobile phone market as it reported a strong first quarter, driven by demand for high-end music and camera phones.

The world’s fifth largest mobile phone manufacturer beat expectations to report more than threefold growth in net income for the first three months of the year to €109m ($132m), on the back of a 41 per cent increase in handsets shipped to 13.3m - ahead of growth in the wider market - and a 55 per cent rise in sales to €1.99bn.

The group, a joint venture between Ericsson of Sweden and Japan’s Sony, said growth in the global handset market continued to exceed expectations. It raised its 2006 forecast for worldwide mobile phone units shipped to more than 900m compared with an earlier prediction of 10 per cent growth on 2005 to 780m.

Last month, Nokia, the world biggest handset maker, also raised its global 2006 market growth forecast to 15 per cent or more, compared with 795m units in 2005.

Among Sony Ericsson’s best selling phones in the quarter were the W800, W550 and W600 Walkman which have digital music playing capabilities. The company announced a further three Walkman branded phones including the mass market clamshell W300.

High-end phones for the Japanese market - including the company’s first handset using FOMA third generation technology for use by NTT DoCoMo - also helped boost the proportion of high-end phones in the product mix increasing average selling price by 4 per cent to €149.

Nokia on Tuesday announced that its average selling price in the quarter was €103, up from its own forecast of at best €99, but down from €110 a year earlier.

Sony Ericsson, which also specialises in high quality camera phones, also launched a raft of new handsets with advanced imaging capabilities, including the first Cyber-shot branded phones, based on Sony’s digital camera range of the same name. The company began to ship a new range of mass market GSM phones.

“We have announced flagship models in our three key strategic areas: music, imaging and enterprise…We are beginning to deliver the differentiation in our product portfolio which Sony Ericsson promised at the start of the joint venture,” said Miles Flint, president.