3G boosts Sony Ericsson sales in Q4

January 18, 2005

Sony and Ericsson announced the consolidated financial summary for the fourth quarter and fiscal year ended December 31, 2004 of Sony Ericsson Mobile Communications AB (Sony Ericsson), the 50:50 joint venture of Sony and Ericsson.

	Q4 2003	Q3 2004	Q4 2004	2003	2004
Numbers of units shipped (million)	8.0	10.7	12.6	27.2	42.3
Sales (EURO m.)	1437	1678	2005	4673	6525
Income before taxes (EURO m.)	46	136	140	-130	486
Net income (EURO m.)	43	90	55	-86	316

* Q3 & Q4 2004 IBT includes consolidation of BMC and Net Income includes deduction of minority interest in BMC 1)
** Q4 2004 Net Income includes a negative effect of a valuation allowance on deferred tax assets of Euro 45 million

Units shipped in the quarter reached 12.6 million, a 56% increase compared to the same period last year. Sales for the quarter were Euro 2,005 million, representing a year-on-year increase of 40%. Income before taxes was Euro 140 million and net income was Euro 55 million, which represent year-on-year improvements of Euro 94 million (204%) and Euro 12 million (28%) respectively.

The company experienced a strong quarter led by consumer demand for the V800 series and Z1010 3G UMTS phones, as well as GSM models like the S700, K700 and K500 series. During the quarter Sony Ericsson increased investment in brand and product development, while the Average Selling Price (ASP), one of the highest in the industry, increased sequentially to Euro 160.

"2004 was a good year for Sony Ericsson as the company established profitability and entered into a growth phase in its development," said Miles Flint, President of Sony Ericsson. "The fourth quarter continued a trend of expansion in both volume and sales, showing the company's ability to effectively compete in this dynamic market. Strong growth in Q4 was led by good up-take of our latest 3G UMTS phone which has laid the groundwork for future expansion of our 3G portfolio."

During the fourth quarter, Sony Ericsson launched a new entry-level GSM product, the J200, for the Asia Pacific and Chinese markets, and introduced the Vodafone V800 and V802SE UMTS phones for the global and Japanese markets. The company also announced the entry-level T290 which will start shipping globally during Q1 and signed an agreement with Sharp Corporation in relation to the co-development of 3G FOMA base software for NTT DoCoMo in Japan.