Owing to both the Japanese quake and falling demand for traditional feature phones, Sony Ericsson has posted a net loss of €50 million in Q2 2011, down from a €12 million profit in the same quarter last year.

Supply constraints caused by the quake resulted in the firm shipping 7.6 million units to retail throughout the course of the quarter, down 31 percent from the 11 million units shipped in Q2 2010.

Sales also fell by 19 percent to €1.19 billion.

Hit from all sides

According to CEO Bert Nordberg, the effect of the quake took hold just as Sony Ericsson's transition to from feature phones to Android was itself having an impact on shipments.

On the positive side, in Nordberg's view the firm's continued adoption of Android bodes well for the health of the firm moving forward.

"We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter," said Nordberg.

"Our shift to Android-based smartphones continues with smartphone sales accounting for more than 70 percent of our total sales during the quarter. We have shipped more than 16 million Xperia smartphones to date.

"We have introduced eight new Xperia smartphones this year and we continue to see strong consumer and operator demand across the Xperia smartphone portfolio."

The borrowing business

Aside from the firm's growing strength on Android, however, it's hard to put all too positive a spin on the firm's quarterly results.

Income before taxes for the quarter came in at -€42 million – down €73 million year-on-year.

Sony Ericsson also revealed negative cash flow of €224 million from operating activities. By the end of the quarter, the company had borrowed €769 million from external sources with total cash balances coming in at €516 million.

The firm estimates that its Android market share sits at 11 percent, both in terms of units andf pure market value.

[source: Sony Ericsson]