Sony Ericsson forecasts drop in demand for mobile phones

Mobile handset manufacturer Sony Ericsson, which last Thursday reported a decline in both quarterly profits and mobile phone shipments, has forecasted a further decline in demand for mobile phones this year.

“Sony Ericsson forecasts that the global handset market for 2009 will contract at least 10 percent from around 1,190 million units in 2008,” the company said.

The company last week released results for the first quarter of 2009, in which it had recorded losses of EU350 million in income, as well as well as a sharp decline in units sold during the period.

“As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand. We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible,” said Dick Komiyama, President, Sony Ericsson. “The management intends to pursue an additional cost saving program targeting a further annual operating expense reduction of Euro 400 million, to be completed by mid-2010.”

The company said handsets shipped in the quarter were 14.5 million, a decrease of 35 percent compared to the same period of last year and in line with its March 20, 2009 interim announcement of approximately 14 million units.