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Sony Ericsson Disappoints: Can It Handle the Pressure?

Five.

That’s the number of consecutive quarters mobile phone maker Sony Ericsson now has reported earnings losses. The latest financial erosion came on Friday when the joint venture between Sony Corp. (SNE) and Ericsson (ERIC) stunned investors and analysts with a loss of 164 million euros ($245 million) in the three months ending Sept. 30, compared to a loss of 25 million euros during the same period a year earlier.

Analysts had predicted Sony Ericsson would lose 227 million euros.

The company suffered as it shipped fewer mobile devices – 45 percent less, in fact, down to 14.1 million. However, margins improved somewhat. A poor economy and intense competition from the likes of the iPhone contributed to Sony Ericsson’s disappointing results.

So what’s next for the company? It appears Sony Ericsson executives hope to make the most of the recent 455 million euro ($676 million) new external financing they’ve secured, mostly from their parent companies. And incoming CEO Bert Nordberg said the manufacturer plans to get tougher as a rival in the smartphone market. Sony Ericsson expects global handset demand to pick up as the recession wanes and plans to kick-start new product launches.

That strategy looks to come at the expense of employees, though. Sony Ericsson already has slashed 4,000 jobs over the past two years and said Friday it will continue “cost cuts” – not-so-secret code for layoffs.


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