Sony Ericsson, the world’s fourth largest mobile phone maker, warned that slower growth in its European markets would hit its first quarter sales, though its gross margin would remain the same on the year ago level.
Net income before tax at the joint venture, owned by Sweden’s Ericsson and Sony of Japan, is set to be €150m ($237.2m) to €200m, while net sales would fall from a year ago level, it said on Wednesday.
”Slowing market growth of mid-to-high end phones in markets where Sony Ericsson has a strong presence is affecting sales,” the firm said, adding the effect was visible mostly in Europe.
”In addition, certain component shortages for popular mid-priced phones have contributed to modest unit sales growth in the first quarter.”
Last week chip maker Texas Instruments cut its first quarter forecasts, citing weaker demand for chips used in higher priced 3G phones, and hitting mobile industry stocks in Europe as investors fear a weakening global economy is biting into consumers’ appetite for pricier phones.
Sony Ericsson President Dick Komiyama said that the market was ”proving to be challenging”.
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