Sony Ericsson ends 2011 in red

Mobile phone manufacturer Sony Ericsson said Thursday that intense competition hit fourth quarter sales hard and forced the company to post a loss of 247 million euros ($318 million) for the year. Sales in the final quarter dropped to 1.29 billion euros, a decline of 18.8 percent from 1.59 billion euros the previous quarter and of 15.7 percent from 1.53 billion euros in the fourth quarter of 2010. "Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter," chief executive Bert Nordberg said in a statement. Sales dropped 17.2 percent overall in 2011. Restructuring charges of 93 million euros in the final quarter contributed to the poor results, but even excluding those charges operating margin plunged to minus 10 percent. "Fourth quarter sales were negatively impacted by macroeconomic challenges in advanced economies contributing to weaker holiday sales, and certain component shortages from the flooding in Thailand in late October and early November 2011," the company said. "In spite of these challenges, throughout 2011 we’ve shifted our business from feature phones to smartphones, and our Android-based smartphone sales in the quarter increased by 65 percent year-on-year," Nordberg said. The number of units shipped in the fourth quarter dropped to 9.0 million however, from 9.5 million in the third quarter and 11.2 million in the final quarter of 2010. The average selling price declined to 143 euros in the fourth quarter of 2011 from the 166 euros in the third quarter.