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Sony Ericsson: Handset demand is slowing

Cell phone maker warns that its first-quarter results will be hurt by diminished demand in Europe for midprice and high-end phones.

Cell phone maker Sony Ericsson said on Wednesday that demand is slowing in Europe for midpriced and high-end handsets, and that slowing demand will hit the company's first-quarter results, notes a story by Barron's Tech Trader Daily.

Sony Ericsson also said component shortages for midpriced phones had hurt sales, which the company expects will reach 22 million phones for the quarter, with an average price of $187. At least one analyst, who previously had predicted 9 percent over the year-ago quarter, told Tech Trader that that number is well below expectations. He had forecast sales of 26.5 million handsets--almost 17 percent more than the figure presented by Sony Ericsson--and now says sales likely will be 10 percent below those of the year-ago quarter.

Considering the current economic climate, though, Sony Ericsson's warning does at least parallel data released in February by Gartner, which predicted that handset sales growth in 2008 would slow to 10 percent worldwide, with market saturation in North America and Western Europe doing the most to slow sales momentum.