Earnings: SonyEricsson Q1 Collapses On R&D Costs, Lower High-End Sales

SonyEricsson (NSDQ: ERIC) sales collapsed to 2.7 billion euros ($4.3 billion) in Q1 – down eight percent from 2.92 billion euros in the year-ago period and 3.77 billion euros in the preceding quarter – thanks to “slowing market growth in mid-to-high end phones“. Pre-tax profit also fell 47 percent to 193 million on higher R&D costs (the company will shortly launch its Xperia X1 Windows Mobile multimedia phone).

And average handset selling price fell from 134 euros last year to 121 euros “due to the impact of softer sales of high-to-mid end models in key markets”. But, in the earnings call, the company refused to detail which markets – and this is still high compared to Nokia (NYSE: NOK) phones.

Coupled with Nokia’s forecast last week of a shrinkage in the mobile market this year, it sounds like tough times ahead. Except Sony (NYSE: SNE) Ericsson is forecasting 10 percent growth, thanks to emerging markets.

New president Dick Komiyama, in the call: “The industry still has a good potential for growth and our challenge is to ensure that we have the right product at the correct price. The first quarter of the year is always very busy in the telephone industry. Although it has been a difficult quarter, Sony Ericsson can be optimistic that it is on the right track in the long term.”

Sony Ericsson’s marketshare for the first quarter was around 8 percent, down from 9 percent in the fourth quarter of last year, but about the same year-on-year.