Mobile phone maker Sony Ericsson on Thursday posted lower-than-expected profit and sales during its key year-end quarter and said it expects only modest growth in the handset market this year.
The poor performance contrasted sharply with smartphone rival Apple Inc, whose results beat forecasts this week on strong sales of its iPhone and iPad.
Sony Ericsson, owned by Swedish company Ericsson and Japanese group Sony Corp, made a pretax profit of 35 million euros ($47 million) on sales of 1.53 billion.
Analysts in a Reuters poll had an average forecast for a pretax profit of 79.7 million euros and sales of 1.82 billion.
One analyst said Sony Ericsson had not refreshed its top of the line, PC-like handset portfolio quickly enough last year to compete with more nimble rivals such as world number one Nokia
or fast-growing firms such as Samsung Electronics.
The competition is so tough you cannot afford not to refresh your portfolio, said Gartner analyst Carolina Milanesi.
Sony Ericsson Chief Executive Bert Nordberg said the lack of new products had somewhat constrained shipments in the quarter. They totaled 11.2 million, up on the previous quarter but down 23 percent on the same period in 2009.
The firm's average selling price (ASP) for the quarter was 136 euros, down 12 percent on the third quarter. Sony Ericsson said this was mainly due to price erosion, foreign exchange and product mix.
Sony Ericsson said it expected modest growth in units in the global handset market for 2011.
The company was ranked the fifth-biggest handset maker in an industry earlier this month but that did not include Blackberry maker Research In Motion, which has reported higher sales than Sony Ericsson in its latest period.
(Additional reporting by Tarmo Virki in Helsinki; Editing by Erica Billingham)