Supply chain constraints hit Sony Ericsson

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Mobile phone maker, Sony Ericsson, has blamed “supply chain constraints” caused by the Japanese earthquake for the 50 million euro (£44 million) loss it experienced during the second quarter of 2011.

Bert Nordberg, president and chief executive of Sony Ericsson, said: “Sony Ericsson’s second quarter profitability was affected by the March 2011 earthquake in Japan. We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter.”

Some 7.6 million units were shipped during the three months to 30th June, a 31 per cent decrease year-on-year and a six per cent decrease sequentially, due to a decrease in volume caused by the lack of supply of critical components.

The slump has also been attributed to an anticipated decline in the number of traditional feature phones shipped and the move towards android-based smartphones.

Smartphones accounted for more than 70 per cent of its total sales during the quarter.

Total sales for the quarter were 1.2 billion euros (1.1 billion), a 32 per cent decrease year-on-year and a four per cent increase sequentially.

Sony Ericsson maintains its forecast for modest industry growth in total units in the global handset market for 2011.

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