Q3 Highlights:
. Turnaround continues with third consecutive quarter of profits
. Continued success of smartphone portfolio keeps ASP at high level
. Launch of Xperia(TM) models in new markets, including China and the U.S.

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the third quarter ended September 30, 2010 is as follows:

Q3 2009 Q2 2010 Q3 2010
Number of units shipped (million) 14.1 11.0 10.4
Sales (Euro m.) 1,619 1,757 1,603
Gross margin (%) 16% 28% 30%
Operating income (Euro m.) -193 36 63
Operating margin (%) -12% 2% 4%
Restructuring charges (Euro m.) 2 32 4
Operating income excl. restructuring charges (Euro m.) -191 68 67
Operating margin excl. restructuring charges (%) -12% 4% 4%
Income before taxes (IBT) (Euro m.) -199 31 62
IBT excl. restructuring charges (Euro m.) -198 63 66
Net income (Euro m.) -164 12 49

Average selling price (Euro) 114 160 154

Bert Nordberg, President & CEO of Sony Ericsson commented, "Our third consecutive quarter of profitable results illustrates that Sony Ericsson's overall performance is stabilising. Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50% of our total sales. During the quarter, we launched our Android-based Xperia(TM) models in new markets, such as China and the U.S., and it is our ambition to become the global number one handset provider on the Android platform."

Income before taxes for the quarter excluding restructuring charges was a profit of Euro 66 million following the positive effects of the transformation programme. Net income for the quarter was Euro 49 million, an increase of Euro 213 million year-on-year and of Euro 37 million sequentially.

The gross margin percentage was 30% and almost doubled year-on-year, reflective of the company turnaround.

Units shipped in the quarter were 10.4 million, a decrease of 26% year-on-year and down 5% sequentially. Average selling price (ASP) in the quarter remained at a high level of Euro 154, a 34% increase year-on-year and a decrease of 4% sequentially, due to product and geographical mix. As a result, sales for the quarter were Euro 1,603 million, essentially flat year-on-year and a 9% decrease sequentially.

Sony Ericsson's net cash position as of September 30, 2010 was Euro 538 million. The negative cash flow from operating activities was Euro 54 million, mainly due to payments during the quarter related to the transformation programme.

Market share in unit base for the quarter remained flat sequentially and is estimated to be approximately 4%. The value market share is estimated to be approximately 6%.

Sony Ericsson maintains a forecast of slight growth in units in the global handset market in 2010.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia(TM) is a trademark of Sony Ericsson Mobile Communications AB. Sony is a registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not expressly granted herein are reserved and subject to change without prior notice.