Sony Ericcson Reports Sharp Loss for Q4, 2008
By Evan Koblentz
Sony Ericsson lost nearly $248 million in the fourth quarter and $96.8 million for 2008, the company announced today.
The quarter’s loss was drastically worse than in the third quarter, which saw a loss of only $33.15 million. A year ago, the company was $494.6 million in the black. For 2007, the company was $1.48 billion on the plus side.
Revenue was $3.86 billion for the quarter and $14.9 billion for the year.
Sony Ericsson shipped 24.2 million phones in the quarter, compared with 25.7 million in the third quarter and 30.8 million a year ago. For the year, the company shipped 96.6 million phones, versus 103.4 million in 2007.
Company President Hideki “Dick” Komiyama cited the tough economy as a continuing factor into the first half of 2009 but said Sony Ericsson’s recent layoffs helped. “In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn. The mobile phone market has been greatly affected by this and as expected, the fourth quarter continued to be very challenging for Sony Ericsson,” he stated.
News highlights in the quarter include Sony Ericsson’s membership in the Google-led Open Handset Alliance (OHA), with plans to develop an Android phone, and the rollouts of the Xperia X1 and Cyber-shot C905 phones.
Peter Boyland, telecom analyst at HIS Global Insight, said in a report today that Sony Ericsson’s troubles are caused by low-cost rivals. In addition, “the company has announced a further savings drive, involving restructuring and consolidation — meaning job losses could very well be on the cards,” he said. “As its key markets stagnate, Sony Ericsson may need to consider serious reinvention if it hopes to expand its business elsewhere into growth markets in emerging regions.”
Martin Announces Resignation
By Evan Koblentz
FCC Chairman Kevin Martin yesterday said he will resign effective Jan. 20, after which he will become a senior fellow at the Washington-based think tank Aspen Institute.
The move is a formality, as Martin was an appointee of President George W. Bush, moving up to the chairman’s seat in Bush’s second term. His replacement in the Barack Obama administration will be Julius Genachowski, although that is not yet announced by the transition team.
Genachowski is already endorsed by the CTIA and public advocacy groups. It’s likely that current commissioner Michael Copps will serve as interim chairman until Genachowski is confirmed by Congress.
Martin, summarizing his tenure, cited nationwide progress in improving the availability and cost of communications.
“During this period, we have seen a telecommunications industry undergoing rapid and unprecedented change. As a result of the market-oriented and consumer-focused policies we have pursued, the American people are now reaping the rewards of convergence and the broadband revolution, including new and more innovative technologies and services at ever-declining prices,” he wrote in a resignation letter to Bush.
Also yesterday, all eight FCC divisions presented public overviews of their work under Martin’s leadership.
Martin’s tenure ends, however, with some controversy and unfinished business. A recent report by House Democrats focused on his allegedly abusive and improper management. Technological issues, such as the change from analog to digital television, are also somewhat chaotic, depending on who you ask, while the role of auctions for public-safety purposes is under debate.
Also in Washington this week, the House began drafting a bailout report – The American Recovery and Reinvestment Act – which contains $2.825 billion in funding for the NTIA. The wireless industry would get $1 billion of those funds for unserved and underserved regions, helping with “…the deployment of basic broadband service or advanced broadband service,” the report states.
“Factors in grant award decisions by the NTIA will include public safety; state reports on priorities; increases in affordability and subscribership; service enhancement for health care delivery, education, or children; enhancement of computer ownership and computer literacy; and state or local matching funds. Grant recipients must also meet buildout requirements and adhere to open access principles,” it continues.
Signs of Life for PTT
By Monica Alleven
Its push-to-talk (PTT) location app with Sprint was just announced this week, and Pacific DataVision already is hearing from some unexpected prospects.
A landscape company and an elevator maintenance worker were among those the company didn’t necessarily expect to hear from, according to Chairman Brian McAuley. But when you think about it, it makes sense. “Customers love ROIs,” he says.
The NextMail Locator, available with Nextel Direct Connect, gives mobile workers the ability to add location-based information, including GPS coordinates, location timestamp, physical street address and an interactive map, to their messages. So, for example, if a waste management company doesn’t pick up someone’s garbage because a parked Cadillac is blocking access and the customer complains they didn’t get the garbage picked up and refuses to pay a return pick-up fee, the waste management company can produce a location timestamp on a picture. The same goes for a landscaper or elevator maintenance worker – they can prove that they were at a location at a given time for the assigned work.
The solution pings a location server to find out the location; it doesn’t require any downloads on the customer’s part. “Our goal has been the simplicity,” McAuley said. The only time a location is picked up is when the user makes a call to report in; it is not designed to track people, he said.
The solution is another indication that Sprint is making good on its word to keep the iDEN network up and running after years of speculation about iDEN’s future. Sprint also is running a new ad campaign, including TV, radio, print and online, to highlight its PTT services and support the ongoing “reinvigoration” of Nextel Direct Connect.
“We’re working very closely with Sprint to bring more value to the (PTT) button,” McAuley said. “We see this as a growth market.” McAuley knows something about PTT; he co-founded Nextel Communications and was its president from 1987 to 1995.
NextMail Locator is the Sprint Nextel-exclusive service and it works on iDEN or the QChat/CDMA network. Pacific DataVision also offers Skymail, which is commercially available for any system. SkyMail is an application that enables mobile workers to wirelessly dictate, document and share time-sensitive information from a mobile phone via e-mail, with their dispatch, central office or another mobile worker by using voice.
OnAsset Adds Location Services
By Evan Koblentz
OnAsset, fresh off its transformation from a telemetry specialist into a machine communications company, is now adding location-based services, and it’s shopping for acquisitions.
The company said it will offer technology from GeoDecisions, which can be used for applications such as environmental monitoring and location tracking. In addition, OnAsset will resell GeoDecision’s IRIS global logistics product, which was developed for the Department of Defense.
The companies will also engage in combined marketing efforts. The deal is exclusive to both sides.
On the acquisition front, “we’ve got our eyes peeled and are talking to some folks,” CEO Adam Crossno said last week. “Typically, it’s folks that take us into vertical markets.”
There is also competition from satellite communications companies, of which OnAsset has a unique view because of its telemetry background, Crossno said. That is an ongoing issue often overlooked by pundits in the cellular machine communications niche, he noted.
“Satellite is going to become much more competitive on a cost basis with cellular and on a functional basis in being able to do much larger data loads,” he said. But of cellular, he added, “I think it’s going to be the go-to technology for the next couple of years until satellite catches up.”
FirstNews Briefs for Jan. 16, 2008
Companies in the News: Virgin Mobile USA, Circuit City, Purple Labs, Sagem Wireless, Sony Ericsson, Orange, Vodafone, DTAC, Nokia Siemens Networks, Sprint
• Virgin Mobile USA said the New York Stock Exchange accepted its business plan to comply with listing standards. The plan is confidential but explains the carrier’s financial and operational initiatives and possible impacts for 2009 and 2010.
• Circuit City finally reached its end. The big-box electronics retailer, which previously announced bankruptcy and closed many stories, is now asking a judge for permission to sell off the last of its merchandise in 567 stores. Items will be on sale from tomorrow until March 31. There is a small chance of another company buying the chain, a consultant said.
• Mobile phone software provider Purple Labs completed the acquisition of the mobile applications suite and software engineering team of Sagem Wireless, a French manufacturer that develops mobile phones branded by Sony Ericsson, Orange, Vodafone and other customers. In parallel, the companies have entered into a multi-product license and development agreement, under which Purple Labs will provide software and engineering services to Sagem in a 3-year deal.
• Total Access Communication Public Company (DTAC) in Thailand has signed a frame agreement with Nokia Siemens Networks as one of its two vendors to upgrade its network to 3G.
• Sprint, the official wireless telecom service sponsor of the National Football League (NFL), says it’s ready for Super Bowl XLIII on Feb. 1 in Tampa, Fla. The carrier added 18 new cell sites in the Tampa area to enhance coverage in and around the Raymond James Stadium.
Filed Under: Industry regulations