There has been much doom and gloom surrounding Sony Ericsson over the last few months, not only from frustrated Xperia X10 owners waiting on their promised Android update but also from the wider blog community. Just earlier this week, Gizmodo questioned how long the company will exist for.
The latest market share statistics also do not make for pretty reading, well at least on the face of it. Sony Ericsson’s overall mobile phone shipment ranking fell from fourth in Q1 2010 to sixth place in Q2 according to iSuppli. This is quite an important milestone as it is the first time Sony Ericsson has ranked outside the top 5 global brands in three years.
However, every cloud has a silver lining and whilst overall Q2 shipments only grew by 4.8 percent, this masks the strong growth delivered by SE’s (Android) smartphones. Sony Ericsson’s smartphone shipments grew by 15.4 percent, making it the fourth fastest growing smartphone brand during the quarter.
This change in strategy from low-margin, high volume phones to higher margin smartphones also led to a near doubling in gross margin from 12 percent in Q2 2009 to 28 percent this year. This trend continued into the third quarter with the gross margin hitting 30 percent and smartphones now compromising more than 50% of total sales. Sony Ericsson is likely to continue this strategy as they look to launch the next Android flagship by the end of the year. The real question is how many existing Xperia customers will be willing to give Sony Ericsson another chance.