Sony Ericsson makes record Q4 profit

Japanese-Swedish mobile phone venture Sony Ericsson posted record fourth-quarter earnings on strong demand for music and camera phones and said it aimed to raise its world market share to third largest from fourth.

Owned by Sweden's Ericsson and Japan's Sony, the handset maker raised its forecast for 2006 total industry handset sales and set a growth forecast of at least 12 per cent for 2007, calling the figure cautiously optimistic.

While Sony Ericsson's report was upbeat, industry leaders Nokia and Motorola are expected to have been pressured by intense competition on pricing. Motorola, ranked number two, recently issued a fourth-quarter profit warning.

"The fourth quarter saw Sony Ericsson finish a strong year with record volumes, sales and net income due to the soaring popularity of our imaging and music phones," company President Miles Flint said in a statement.

Sony Ericsson pretax profit rose to a record €502 million ($648.9 million), exceeding the average forecast of €428 million in a Reuters poll and €206 million in the same period of 2005.

Ericsson shares were up 0.68 per cent to 29.55 crowns at 10.13am, while Sony shares had closed down 0.53 per cent in Tokyo.

Sony Ericsson said it increased its market share by one percentage point to 9 per cent during the quarter due to sales of its K800/K790 Cyber-shot phone and its Walkman phones, based on Sony's brand of music players.

It raised its estimate for 2006 industry handset sales to 980 million units from a previous 950 million. Its 2007 forecast was for 1.1 billion units.