The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the second quarter ended June 30, 2006 is as follows: Q2 2005 Q1 2006 Q2 2006 Numbers of units shipped (million) 11.8 13.3 15.7Sales (EURO m.) 1,614 1,992 2,272Income before taxes (EURO m.) 87 151 211Net income (EURO m.) 75 109 143 Sales for the quarter were Euro 2,272 million, representing a year-on-year increase of 41%. Income before taxes was Euro 211 million representing a year-on-year increase of 143%. Net income was Euro 143 million. Units shipped in the quarter reached 15.7 million, a 33% increase compared to the same period last year, and generated an increase in market share both on a year-on-year and sequential basis. Sony Ericsson shipped three new Walkman branded phones, the W300, W700 and W42S as well as announcing two new Walkman models: the W850, a tri-band/UMTS slider phone, and the quad-band EDGE W710, the first sports Walkman with pedometer and jogging applications. The W42S for KDDI, the first Walkman branded phone for the Japanese market, was released too. Sony Ericsson’s first Cyber-shot 3.2 Megapixel camera phone, the K800, was also shipped following the successful introduction of the Walkman brand to the mobile phone market last year.FOMA TM phones for NTT DoCoMo were increased to three, with the introduction of the SO702i and SO902iWP, in Japan. ”The second quarter has seen Sony Ericsson both announce and start to ship a wide variety of products confirming the company’s ability to compete, capture market share and profitably grow the business. With a product line-up that includes a broad range of both basic and feature phones, Sony Ericsson is now in a position to broaden its customer base in all market regions and customer segments.” Said Miles Flint, Sony Ericsson. Average Selling Price (ASP)declined due to a greater proportion of low-pricedmodels, such as the J100, J220 and J230 shipping in volume. Marketing expenditure increased with new products, such as the K610, K800 and the M600 Symbian OS messaging phoneentering the market towards the end of the quarter, and R&D investment continued to increase to support further expansion of the portfolio in 2007.Up from the previous estimate of “above 900 million units,” Sony Ericsson predicts the global market outlook for 2006 to be above 950 million units.
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