Nokia, Sony Ericsson cramming to recover losses
They used to be leaders in the mobile manufacturing industry. But with reports of losses quarter by quarter since last year, both Nokia and Sony Ericsson are just about running out of options to hit high margins. To salvage their losses, both companies are on the verge of releasing high-end mobile devices in time for the Christmas rush.
The seemingly continuing loss was brought about by the economic slump, affecting largely Nokia’s market shares as well as that of Sony Ericsson. Instead of purchasing new mobile devices, people are zipping their purses in favor of more important expenditures. With slow consumer spending, both the sales and margins of the two companies are undoubted most hurt in the industry.
On the other hand, the surge of high-end products from stiff competitors such as Apple and Samsung widened the gap even more. With the release of iPhone3GS from Apple and Samsung’s Jet Smart phone, the sales of both Sony Ericsson and Nokia nosedived steadily from one quarter to the next.
Finnish pride in mobile phone making Nokia Corporation reported earlier that it will upgrade its projections for the global network infrastructure market, cutting by half its prediction of 10% fall for this year.
As for Sony Ericsson, analysts are divided on its pursued ventures, particularly after the poor performance during the second quarter. Though no sharper drop has been witnessed, some analysts are considering the gaining Swedish currency and the regional market posing plenty of uncertainties still.
While it seems the factors weighing down recovery attempts of both Nokia and Sony Ericsson seem piling, there are fairly high expectations that their pursuits will go smooth. This, because both companies had their larger investments cut down for the first six months of 2009. This is seen a good sign of catching up.
For more information on this post, click here: wsj.com
Tags: Nokia, Sony Ericsson
