Sony Ericsson sees profits tumble, turns on workers

There'll be long faces at Sony Ericsson this evening, with the gloomy news that the mobemeisters is cutting 2,000 jobs after pulling in just €6m in profits in the last three months. This is a massive slide on the €220m the company made during the same period in 2007, despite shipping almost as many phones. In their second …

[Dave]

Are these the UIQ people?

Are these 2000 people SonyEricsson is sacking all UIQ people? As Mr Orlowski mentioned when Symbian went open source.

"UIQ is today dismissing over half of its staff: more redundancies will follow, we understand, once negotiations have taken place."

http://www.theregister.co.uk/2008/06/24/andrew_on_symbian/

[KazR]

I'd be happy with these figures!

according to the report:

'bringing in €2.8bn million'

2.8Bn million, and they're not happy???? That's almost MS profit levels.

Mines the one with wads of monopoly money stuffed in the pockets.

[Anonymous Coward]

Zero margin

I quickly whipped my calculator out and it strikes me that for those figures to be correct (ie - a selling price of $116 = $6m profit, and a selling price of $125 = $220m profit), they must be making almost exactly $Bugger-All margin on the new (lower) price.

No wonder they can't stay in business!

[Giles Jones]

Look after your customers

SE didn't and this is the result.

People can complain that iPhone users are fanboys etc... but the handsets work better than a P910 ever did from day one. SE never provided fixes for some of the essential features, never mind add new ones.

[Anonymous Coward]

@Kazr

"2.8Bn million, and they're not happy". 'Bringing in' implies turnover, not profit. Big difference.

[Anonymous Coward]

maybe the should...

Start by making a hand set I want more than once every 30 months or so!

I had to wait ages to get an S700, then the made nowt that was nice untill the W850.

And now again I am gona have to wait the better part of a year for them to pull there finger out even though I have already been waiting what must be almost 18 months.

I am a big sony erricons, but I feel my support (and puting up with there damm headset connection and crappy memory stick style things) is fadeing.

I see Samsung or god forbid nokia taking my next wadd of cash. (all though Mr Reg, I do keep waiting for you to do a 'must' have reivew, and ya can keep your stinky iphones)

-p

[Andy Watt]

Operator Power

Ah, grellox. I knew UIQ would die on its' arse the moment Nokia finally got hold of symbian. Pity, (it's a personal thing) I find Series 60 inferior to UIQ. Too much reliance on bloody softkeys and submenus.

Getting back on-topic - it's time to acknowledge that the operators now have so much power that they're going to start making or breaking handset manufacturers. How much longer before Vodafone starts making its' own handsets seriously? They've toyed with the idea before, using ODMs to manufacture Vodafone branded handsets. Some of those reference models from the east are looking very whizzy now.

These are dark times for consumer mobile hardware manufacturers and I'm bloody glad I left the industry at the tail end of 2006.

Bill, cos there's isn't one of Sarin

[pctechxp]

from the moment they teamed with Sony

They were doomed.

Sony had crap handsets while Ericsson produced solid performing if apparently boring handsets, (I'd still have my trusty S868 if I could get batteries for it even if it is a brick by todays standards)

meanwhile Nokia produced cheap flashy handsets that were bundled by the networks because they supported gimmicks he networks were trying to push so became popular, sony tried to go down the same route and failed (should have stuck to stereos and speakers)

Ericsson's business suffered also so they tried to join up with Sony to save both, since then the handsets have not been on a patch on the old 'uns, the T250i and the K800i (I have both) have been about the closest resemblance to the old Ericssons. but still not as good.

Its time to ditch Sony, Ericsson and get back to making high quality PHONES.

I do feel sorry for the people losing their jobs mind

I'm a card carrying, old Ericsson fanboy and proud of it.

Mine's the one with make yourself heard written on the back.

Right I'm off to my watering hole.

[Doug Glass]

Can't Get No Satisfaction

They didn't meet their projections, their [gross?] income went down a huge amount, and their stockholders are not happy.

Keep in mind the objectives of all "for profit" corporations: grow the company, increase the bottom line and increase stockholder value.

Any facet of the company that conflicts with these three objectives is fair game for taking costs out of the business. That includes procurement (lower quality parts a la Nvidia), staffing (terminating employees), scaling back R&D, outsourcing, and just about anything else that cost money. Excluding huge salaries and bonuses of top executives of course.

[Zmodem]

Walk

Most people with SE phones have walkman all over it for a reason

[Daryl Radivojevic]

No innovation in 2008

This does not surprise me one bit. When the T610 come out, I ditched my Nokia and became a Sony-Ericsson fan. Nokia stalled, and we had record Sony-Ericsson profits. Sony-Ericsson then released incremental upgrades to the T610 like the K750 etc. and things were going fine, until this year. They simply haven't released anything new in the past year.

Their handsets don't have features like GPS, bigger screens, good 3G support. Hence nobody is buying anything from them, except those who are looking for a cheap phone. Everybody else is seriously looking at their competitors who now have greater features. If Sony-Ericsson don't do a turn-around, then worse 3rd quarter results are here to come.

[eddiewrenn]

Maybe it's the kick they need

I loved my T68, my K790, my K800, and my replacement K810, but they do not bring out new, must-have phones quick enough and they p*ss me off by separating their strong features (camera, music) into different phones. Provide me with a phone with a 5+MP camera and the proper Media Centre and I'm there.

For my last upgrade, I got a Viewty, sold it, and stayed with my K810. If they'd bought out an all-rounder, I'd have been there.

If the Xperia is great, I'm there. If not, I'm off to Nokia or to the very dark side of the iPhone.

[James Whale]

Innovation

The C902 is an excellent phone but the first one I've really liked since the K800, while the Xperia X1 is the the first really innovative handset SE have produced for a long time. They produce easy-to-use, reliable phones, but don't push the boundaries often enough with specs/features, and occasionally release phones (e.g. P910 or K850, both of which I've owned) with really bad firmware, effectively using their early adopters to beta-test the bugs out of it for months after release - this is really bad form for any company.

Overall I love SE handsets (particularly the intuitive OS) and wouldn't touch Nokia with yours, but they need to innovate more and stop rushing unstable firmware out the door.

[Charlie Clark]

@Daryl

Check out the G700 and G900 Excellent devices in the tradition just had miserable press coverage,

[Mark]

I see the "risky jobs" are staying, though

I though the reason why the higher ups got so much money was because they brought in so much profit? If that's true, surely they should be sacking the higher ups FIRST.

Responsibility is probably alien to them.

[yeah, right.]

Ah yes

Of course. The "quarter to quarter" reaction to appease the all-powerful stockholders. To the detriment of the product, the long term prospects of the company, and of course the employees who actually built said company. Meanwhile, the execs keep getting their multi-million bonuses. I sense a complete disconnect there between "authority" and "responsibility".

I guess "The Corporation" pseudo-documentary was right when they said that the modern corporation, as a "individual", is clinically a psychopath. I wonder how long people are going to put up with being used, abused and tossed out before the revolution comes (again)? Or are we just so many well trained sheep by now that people think this type of behaviour is completely acceptable?

[N]

ROE - rate of exchange

2,000 dutiful workers ~= 1 do-nothing exec

[Charles Manning]

300M/2000staff

= =150k euro (==240k USD) per employee.

Sure, much of that is going to paper clips, coffee and buildings, but still that's quite a bundle.

[Matthew]

what do you expect

The T610 was great..

the k700i was great..

the k800i was/is pretty good (my current phone), though is pretty much the same as the k700..

and in the last year and a half?? nothing good has come out of the factories at all..

Then they wonder why people have stopped buying

[Dave Edmondston]

@eddiewrenn`

I totally agree - the K800 was the last SE phone I really liked; I got a P1 for data connection and found it really clunky.

Now happily with a Nokia E51- where Nokia dipped, SE stole the market. Now Nokia are back with good handsets, and SE seem to be on the decline.

[Ronny Cook]

@AC @Kazr

""2.8bn million, and they're not happy". 'Bringing in' implies turnover, not profit. Big difference."

Yah, but 2.8Bn million = 2.8 quadrillion, where did the money GO? That's something like 100 times the gross *world* product. Maybe they sold a bunch of stock back to themselves a few thousand times?

In which case maybe rounding the cents in the VAT calculations is what killed them...

...Ronny

[Jay]

I went to the dark side once...

A long time ago I switched from Nokia to the T610. It was a fine until I decided that I wanted to sync it up with Outlook. And that was virtually the end of that. In order to get it to do anything uselful I'd have to fork out for some third party software (XNTD I believe). So back I went to Nokia and immediately sync'd my 6230i using PC Suite (whis is more or less free). Since then I've had an N70 and N73 and have no intention of going back to S-E. Ever. And I'm a bit of a Sony fanboi too!