Ericsson announces first quarter losses

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Ericsson has released its first quarter figures showing a severe decline in its net income from its partnership with Sony.

At this point last year, its net income was SKr2.6 billion (£0.21 billion) but this has plummeted by 30 per cent to SKr1.8 billion.

Carl-Henric Svanberg, chief executive of Ericsson, said in a statement: “Our joint ventures, Sony Ericsson and ST-Ericsson, are affected by the economic downturn and the dramatic decline in consumer demand for handsets. Extensive programs to reduce costs are ongoing to adjust to the current market environment and restore profitability.”

However, sales did increase by 12 per cent and when compared to comparable handsets the rise was 16 per cent but the Financial Times stated this was due to the weak Swedish Krona, which at constant currency would only show a five per cent rise.

Ericsson is not the only mobile company to be suffering during the recession. Last week, Nokia announced that its profits fell by 74 per cent but Samsung has stated that smartphones are the best way for mobile companies to stay strong in spite of the current financial climate.

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