Sony Ericsson More than Doubles Year-on-Year Income Before Taxes

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the second quarter ended June 30, 2006 is as follows:

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. 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.

Sony Ericsson continued the momentum of the first quarter by shipping three new Walkman branded phones, the W300, W700 and W42S as well as announcing two new stylish 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 quad-band EDGE W810 Walkman® phone, a follow-up to the popular W800, became a big success during the quarter and continued to build the company’s position as a leader in mobile music. This was further enhanced by the shipment of the W42S for KDDI, the first Walkman® branded phone for the Japanese market.

Following the successful introduction of the Walkman® brand to the mobile phone market last year, the company started shipping the K800, Sony Ericsson's first Cyber-shot branded 3.2 Megapixel camera phone, bringing an instantly recognisable Sony camera brand to its high-tier imaging products. In Japan, Sony Ericsson increased its line up of FOMA™ phones for NTT DoCoMo to three, with the shipment of the SO702i and SO902iWP+.

"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, President of Sony Ericsson.

R&D investment continued to increase to support further expansion of the portfolio in 2007 and marketing expenditure also increased as new products, such as the K610, K800 and the eagerly awaited M600 Symbian OS messaging phone entered the market towards the end of the quarter. Average Selling Price (ASP) declined slightly sequentially, due to a greater proportion of low-priced models, such as the J100, J220 and J230 shipping in volume.

Growth in the global handset market continued to outpace expectations, and Sony Ericsson now forecasts the global market outlook for 2006 to be above 950 million units, up from the previous estimate of "above 900 million units".