Sony Ericsson posts 4Q loss of $245 million

London, January 19: Like all other industries struggling to survive in the grim economic conditions, the cell phone market has also released dismal reports, with Sony Ericsson being the latest casualty.

The company posted a loss of about $245 million in the fourth quarter, drastically down from the $495 million profit in the year-ago period.

Sony Ericsson is a joint venture between Japanese consumer electronics company Sony and Swedish mobile phone maker Ericsson. It said shipments in the last quarter of 2008 were 24.2 million, down 21 percent from the same period last year.

"In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn," Sony Ericsson president Dick Komiyama said in a statement. "We foresee a continued deterioration in the marketplace in 2009, particularly in the first half."

Only last week, Sony Ericsson’s chief executive, Hideki Komiyama, had said that the firm was very carefully examining its product portfolio and is planning to focus on more expensive, higher-end products. It recently launched the Xperia X1 and other phones boasting of some of the most high-profile cameras in a handset.

However, that keeps the company from gaining a large share in emerging markets like China and India where rivals Nokia, Samsung, and Motorola dominate with a wide range of entry-level phones.

Experts also believe that targeting the market for high-profile phones might be a good idea as not many new customers are being added, given the current economic situation. "Given that the market is becoming polarized around the high and low end I think they've got to refocus on the high tier. This is Sony Ericsson's core competency and gives them the best chance of restoring profitability," Geoff Blaber, an analyst at CCS Insight, reportedly said.

Sony Ericsson is undergoing massive restructuring as a part of its plans to achieve cost savings worth some $398 million. The company has already announced 2,000 job cuts and the number is expected to rise.