Sony Ericsson, the world’s ninth-biggest handset maker, reported a pretax loss of $316.57 million for Q4 in 2011, blaming the demand slowdown and tough competition prevailing in the smartphone market.  The company’s sales for Q4 were around $1.7 billion, approximately 16 percent less than last year, with total shipments reduced by 20 percent. With Apple sales making a comeback in Q4 2011, Sony Ericsson’s situation appears all the more dire.

Android handset makers battle each other

Sony Ericsson points to increasing competition, especially in the Android market. In fact, several mobile manufacturing companies, including HTC and Motorola, are blaming the intense competition for their diminishing financial results in the fourth quarter, except Samsung, whose Galaxy series smartphones are enjoying loads of love.

“Sony Ericsson and Motorola have been fluctuating between losses and profits for about two years”, said Geoff Blaber, analyst at CCS Insight. “I think, the fact that we are now also seeing HTC beginning to struggle indicates that all is not well for a large proportion of Android manufacturers. It is very, very difficult for them to make money,” he added.

Sony’s hopeful smartphone strategy: post-Ericsson acquisition

Having such a situation, Sony Ericsson said on Thursday it expects Sony’s $1.35 billion acquisition of Ericsson’s 50 percent stake in the venture to be finalized, at the latest, in February.

“It allows us even deeper integration with Sony offering. Our focus on Android, our focus on smartphones will not be different,” CFO Bill Glaser told Reuters in an interview.

Recently at CES 2012, Sony also announced a new line of Xperias: the Xperia Ion, the first LTE Xperia smartphone from Sony, available exclusively with AT&T in the US, and the Xperia S, the first smartphone in the Xperia NXT series.  There are two more new smartphones for the Japanese market: the Xperia acro HD, the follow-up to Xperia acro with popular Japan-specific features including infrared port data exchange, mobile wallet and mobile TV, and the Xperia NX, a variant of Xperia S for the Japanese market.

Finally, we also expect Sony to push the borders of its gaming ecosystem by opening up for developers. No official launch date has been announced just yet, but a beta version of the PlayStation Suite SDK will be offered to select developers in the U.S., Japan and Korea. It leverages C# and can be run on Windows XP and 7.  Sony wants to develop the kit further before rolling it out into general availability, hoping to lure in developers that are interesting to get their games offered for users of Sony’s popular gaming devices. These will include its PlayStation Certified products as well as the upcoming PlayStation Vita.