* Q2 pretax loss 283 mln euros, matches expectations
* Takes 1 mln eur in charges, less than expected
* Still sees handset market down at least 10 pct this year
* Says Q2 market share above 5 pct vs forecast 5.9 pct
(Recasts, adds company, analyst comment, detail, background)
By Anna Ringstrom and Helena Soderpalm
STOCKHOLM, July 16 Mobile phone maker Sony
Ericsson braced for a tough second half of 2009 after losing
market share in the second quarter as its mid-range products
found little favour among a declining customer base.
The handset industry this year faces its worst downturn on
record and Sony Ericsson expects the global market to shrink at
least 10 percent.
The firm has rapidly lost market share in recent quarters
with a portfolio focused on camera and music phones, mid-range
products that are suffering more from the demand slump than
basic models or high-tech gadgets such as the i-Phone.
The first global handset maker to report second quarter
figures, Sony Ericsson on Thursday posted a pretax loss of 283
million euros ($398.6 million), in line with expectations,
including 1 million in restructuring charges.
World no.1 Nokia NOK1V.HE is due to report second-quarter
earnings on Thursday at 1000 GMT.
The mean forecast in a Reuters poll had been for Sony
Ericsson, the world's fifth-biggest, to report a 284 million
euro loss before restructuring charges of 62 million.
Sony Ericsson said cost cuts and a better product mix had
contributed to losses shrinking from the 358 million euros of
the previous three months.
"As expected, the second quarter was challenging and we
still believe the remainder of the year will be difficult for
Sony Ericsson," said Sony Ericsson President Dick Komiyama.
"Our focus remains on bringing the company back to
profitability and growth as quickly as possible. Our performance
is starting to improve due to our cost reduction activities."
'STABILITY AT A LOW LEVEL'
Komiyama told a conference call there were signs of
stability in the handset market.
"We see continued tough conditions ... There is a certain
stability in the market, but it is on a low level," he said.
Sony Ericsson shipped 13.8 million units in the quarter -- a
decrease of 43 percent year-on-year and down 5 percent on the
previous quarter -- at an average selling price of 122 euros.
Several analysts said the shipments figure was
The firm said its market share was over 5 pct in the second
quarter, compared to 6 percent in the previous quarter and a
mean forecast for 5.9 percent.
"The result came in as expected, but on the negative side
they keep losing market share and sales were lower. On the
positive side, the average selling price is being kept up pretty
well and they have a net cash position of almost 1 billion,"
said Greger Johansson, analyst at Redeye.
"I think they will see a couple of tough quarters going
forward and I still think there is a risk they will need new
Some analysts were more positive.
"Although Sony Ericsson's unit shipments in the second
quarter were disappointing, the more important metric is an
improvement in margin," Geoff Blaber at CCS Insight said.
"An operating margin of -16 percent compared to -21 percent
in the first quarter suggests Sony Ericsson has turned the
corner. The cost-cutting measures have created a foundation on
which to improve performance going into 2010."
Shares in Ericsson were up 2 percent at 0907 GMT.
(Additional reporting by Tarmo Virki; editing by John