SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 6-K

 

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REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

January 16, 2008

 

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LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

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Torshamnsgatan 23, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

 

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Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   x    Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ¨    No  x

Announcement of LM Ericsson Telephone company, dated January 16, 2008 regarding “Sony Ericsson sells over 100 million handsets in 2007”.

 

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PRESS RELEASE		January 16, 2008

Sony Ericsson sells over 100 million handsets in 2007

Q4 Highlights:

 

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18% increase in volume year-on-year

 

•

Continued market share gains and profitable growth

 

•

Continued investment for the future

2007 Highlights:

 

•

Over 100 million units sold – more than double global market growth rate

 

•

Margins remain strong as company shifts to broader portfolio

 

•

Unit growth underpinned by increased sales of lower priced phones

 

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145 million music enabled phones sold to date, of which 57 million were Walkman® phones – maintaining leadership in music

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the fourth quarter ended December 31, 2007 is as follows:

 

		Q4 2006			Q3 2007			Q4 2007			2006 FY			2007FY
Number of units shipped (million)		26.0			25.9			30.8			74.8			103.4
Sales (Euro m.)		3,782			3,108			3,771			10,959			12,916
Gross Margin (%)		29.0	%		30.7	%		31.8	%		29.1	%		30.6	%
Operating Income (Euro m.)		484			393			489			1,257			1,544
Operating Margin (%)		12.8	%		12.7	%		13.0	%		11.5	%		11.9	%
Income before taxes (Euro m.)		50li2			384			501			1,298			1,574
Net Income (Euro m.)		447			267			373			997			1,114
Average Sales Price (Euro)		146			120			123			146			125

Units shipped in the quarter reached 30.8 million, a 18% increase compared to the same period last year, generating continued sequential and year-on-year market share gains. Sales for the quarter were Euro 3,771 million, in line with sales a year ago reflecting a strategic shift to a greater proportion of lower priced handsets in the product portfolio. Income before taxes for the quarter was Euro 501 million in line with a year ago. Net income for the quarter was Euro 373 million.

Sony Ericsson gained market share during the quarter due to the continued success of such products as the K550 Cyber-shot™ and the W200, W300 and W580 Walkman® phones in the Americas and Europe. Although Average Selling Price (ASP) increased slightly sequentially during the quarter, as a result of the introduction of new flag-ship Walkman® and Cyber-shot™ phones such as the W910 and K850 models, the trend for falling ASPs year-on-year reflects the company’s direction to broaden its product portfolio.

“Sony Ericsson finished a very good year, which highlighted how the company has strategically positioned itself to capture market share with an expanded product portfolio. Investments are being made in both R&D and brand building, to deepen the portfolio and strengthen Sony Ericsson’s presence in new and developing markets around the world. Our target remains to become one of the top three players in the industry, and the momentum we established in 2006 and 2007 makes this a realistic and achievable ambition,” said Dick Komiyama, President of Sony Ericsson.

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Sony Ericsson estimates the 2007 global handset market as being over 1.1 billion units, in line with previous forecasts. On this basis the company believes it grew market share around 2 percentage points to reach slightly over 9% for the full year 2007 compared to full year 2006.

During the fourth quarter Sony Ericsson announced that it had entered into a series of agreements with Motorola, Inc. whereby Motorola acquired 50% of the share capital in U.I. Holdings BV, the Dutch owner of the Swedish software company UIQ Technology AB, which was acquired by Sony Ericsson from Symbian Ltd. earlier in the year. The transaction was ratified by the appropriate competition authorities during the quarter.

Sony Ericsson announced a number of new products during the quarter including high-end W890 Walkman® and the K630 and the K660 HSDPA web phones. The company also announced its strategy to expand Sony Ericsson’s PlayNow™ digital content distribution application into a full service proposition during 2008.

On November 1, 2007 Sony Ericsson’s president Miles Flint stepped down and Hideki ‘Dick’ Komiyama joined the company to replace him. Dick Komiyama joined Sony Ericsson from Sony Corporation where he was Director, Chairman, Sony Electronics Inc., USA, and Executive Vice President of Electronics Marketing and Sales Strategies of Sony Corporation, Japan.

WALKMAN® and Cyber-shot™ are trademarks or registered trademarks of Sony Corporation.

PlayNow™ is a trademark of Sony Ericsson.

EDITOR’S NOTES:

Financial Statements and Additional Information:

Financial Statements:

Consolidated Income Statement

Consolidated Income Statement – Year-to-Date

Consolidated Income Statement – Isolated Quarters

Consolidated Balance Sheet

Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows – Year-to-Date

Consolidated Statement of Cash Flows – Isolated Quarters

Additional Information:

Net Sales by Market Area by Quarter

- ENDS -

Sony Ericsson Mobile Communications was established as a 50:50 joint venture by Sony and Ericsson in October 2001, with global corporate functions located in London. The company serves the worldwide communications market with innovative and feature-rich mobile phones, accessories and PC-cards, and it has R&D sites in Europe, Japan, China, India and America. Sony Ericsson is the title sponsor of the Women’s Tennis Association, and works with the Association to promote the Sony Ericsson WTA Tour in over 80 cities during the year. For more information, please visit www.sonyericsson.com

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CONTACTS:

Investors/Analysts

Ericsson Investor Relations

Gary Pinkham (Stockholm) +46 8 719 0858

Sony Investor Relations

Shinji Tomita (London) +44 207 444 9713

Tatsuyuki Sonoda (Tokyo) +81 3 6748 2180

Press/Media

Sony Ericsson Corporate Communications & PR

Aldo Liguori (London) +44 208 762 5860

Merran Wrigley (London) +44 208 762 5862

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see Sony’s and Ericsson’s filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Oct-Dec
EUR million		2007			2006			Change
Net sales		3,771			3,782			0	%
Cost of sales		-2,573			-2,686			-4	%
Gross profit		1,198			1,096			9	%
Gross margin %		31.8	%		29.0	%		3	%
Research and development expenses		-349			-256			36	%
Selling and administrative expenses		-375			-367			2	%
Operating expenses		-724			-623			16	%
Other operating income, net		15			10			43	%
Operating income		489			484			1	%
Operating margin %		13.0	%		12.8	%		0	%
Financial income		19			19			3	%
Financial expenses		-7			0			—
Income after financial items		501			502			0	%
Taxes		-118			-43			176	%
Minority interest		-10			-12			-18	%
Net income		373			447			-17	%
Number of units shipped (million)		30.8			26.0			18	%
ASP (EUR)		123			146			-16	%

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Jan-Dec
EUR million		2007			2006			Change
Net sales		12,916			10,959			18	%
Cost of sales		-8,958			-7,775			15	%
Gross profit		3,958			3,184			24	%
Gross margin %		30.6	%		29.1	%		2	%
Research and development expenses		-1,173			-906			29	%
Selling and administrative expenses		-1,260			-1,086			16	%
Operating expenses		-2,432			-1,992			22	%
Other operating income, net		18			65			-74	%
Operating income		1,544			1,257			23	%
Operating margin %		11.9	%		11.5	%		0	%
Financial income		62			43			43	%
Financial expenses		-32			-2			—
Income after financial items		1,574			1,298			21	%
Taxes		-423			-267			59	%
Minority interest		-36			-33			9	%
Net income		1,114			997			12	%
Number of units shipped (million)		103.4			74.8			38	%
ASP (EUR)		125			146			-15	%

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT—ISOLATED QUARTERS

 

		2007												2006
EUR million		Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Net sales		3,771			3,108			3,112			2,925			3,782			2,913			2,272			1,992
Cost of sales		-2,573			-2,154			-2,192			-2,039			-2,686			-1,995			-1,625			-1,469
Gross profit		1,198			954			921			886			1,096			917			647			524
Gross margin %		31.8	%		30.7	%		29.6	%		30.3	%		29.0	%		31.5	%		28.5	%		26.3	%
Research and development expenses		-349			-280			-283			-261			-256			-225			-223			-202
Selling and administrative expenses		-375			-280			-321			-284			-367			-287			-246			-186
Operating expenses		-724			-560			-604			-545			-623			-511			-470			-388
Other operating income, net		15			-1			-2			5			10			21			26			7
Operating income		489			393			315			346			484			427			203			143
Operating margin %		13.0	%		12.7	%		10.1	%		11.8	%		12.8	%		14.6	%		8.9	%		7.2	%
Financial income		19			7			18			18			19			8			8			9
Financial expenses		-7			-16			-6			-2			0			-1			0			0
Income after financial items		501			384			327			362			502			433			211			151
Taxes		-118			-109			-97			-100			-43			-127			-64			-34
Minority interest		-10			-8			-10			-9			-12			-8			-5			-9
Net income		373			267			220			254			447			298			143			109
Number of units shipped (million)		30.8			25.9			24.9			21.8			26.0			19.8			15.7			13.3
ASP (EUR)		123			120			125			134			146			147			145			149

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Dec 31 2007		Sep 30 2007		Dec 31 2006
ASSETS
Total fixed and financial assets		572		511		469
Current assets
Inventories		437		620		437
Accounts receivables		1,870		1,803		1,653
Other assets		345		544		310
Other short-term cash investments		1,431		954		1,580
Cash and bank		724		804		693
Total current assets		4,808		4,725		4,673
Total assets		5,380		5,236		5,141
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity		2,026		1,663		1,781
Minority interest		64		70		45
Total equity		2,090		1,733		1,826
Total long-term liabilities		26		22		20
Accounts payable		1,263		1,602		1,276
Other current liabilities		2,001		1,879		2,019
Total current liabilities		3,264		3,481		3,296
Total shareholders' equity and liabilities		5,380		5,236		5,141
Net cash*		2,155		1,758		2,272

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*	Net cash is defined as cash and bank plus short-term cash investments less interest bearing liabilities.

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Oct-Dec
EUR million		2007		2006
OPERATIONS
Net income		373		447
Adjustments to reconcile net income to cash		17		23
		390		470
Changes in operating net assets		44		50
Cash flow from operating activities		434		520
INVESTMENTS
Investing activities		-27		-26
Cash flow from investing activities		-27		-26
FINANCING
Financing activities		0		- 66
Cash flow from financing activities		0		-66
Net change in cash		408		428
Cash, beginning of period		1,758		1,861
Translation difference in Cash		-10		-16
Cash, end of period		2,155		2,273

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jan-Dec
EUR million		2007		2006
OPERATIONS
Net income		1,114		997
Adjustments to reconcile net income to cash		107		85
		1,221		1,082
Changes in operating net assets		-305		100
Cash flow from operating activities		916		1,182
INVESTMENTS
Investing activities		-164		-134
Cash flow from investing activities		-164		-134
FINANCING
Financing activities		- 849		-278
Cash flow from financing activities		-849		-278
Net change in cash		-97		770
Cash, beginning of period		2,273		1,537
Translation difference in Cash		-21		-34
Cash, end of period		2,155		2,273

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS—ISOLATED QUARTERS

 

		Oct-Dec		Jul-Sep		Apr-Jun		Jan-Mar		Oct-Dec		Jul-Sep		Apr-Jun		Jan-Mar
EUR million		2007		2007		2007		2007		2006		2006		2006		2006
OPERATIONS
Net income		373		267		220		254		447		298		143		109
Adjustments to reconcile net income to cash		17		32		30		28		23		20		22		20
		390		299		250		282		470		318		165		129
Changes in operating net assets		44		88		16		-454		50		-21		18		53
Cash flow from operating activities		434		387		266		-172		520		297		183		182
INVESTMENTS
Investing activities		-27		-53		-31		-53		-26		-36		-29		-43
Cash flow from investing activities		-27		-53		-31		-53		-26		-36		-29		-43
FINANCING
Financing activities		0		- 300		- 548		- 1		- 66		- 2		26		- 236
Cash flow from financing activities		0		-300		-548		-1		-66		-2		26		-236
Net change in cash		408		34		-312		-226		428		259		180		-97
Cash, beginning of period		1,758		1,730		2,045		2,273		1,861		1,595		1,428		1,537
Translation difference in Cash		-10		-6		-3		-2		-16		7		-13		-12
Cash, end of period		2,155		1,758		1,730		2,045		2,273		1,861		1,595		1,428

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

EUR million

 

		2007												2006
Isolated quarters		Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		2,251			1,715			1,729			1,598			2,145			1,600			1,090			1,029
Americas		636			573			499			365			555			417			328			250
Asia		884			820			885			961			1,082			896			853			713
Total		3,771			3,108			3,112			2,925			3,782			2,913			2,272			1,992
* of which Western Europe		1,569			1,103			1,102			1,078			1,478			1,115			748			674
		2007												2006
Sequential change (%)		Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		31	%		-1	%		8	%		-26	%		34	%		47	%		6	%		-27	%
Americas		11	%		15	%		37	%		-34	%		33	%		27	%		31	%		-19	%
Asia		8	%		-7	%		-8	%		-11	%		21	%		5	%		20	%		20	%
Total		21	%		0	%		6	%		-23	%		30	%		28	%		14	%		-14	%
* of which Western Europe		42	%		0	%		2	%		-27	%		33	%		49	%		11	%		-35	%
		2007												2006
Year over year change (%)		Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		5	%		7	%		59	%		55	%		52	%		35	%		43	%		71	%
Americas		15	%		37	%		52	%		46	%		79	%		77	%		53	%		53	%
Asia		-18	%		-8	%		4	%		35	%		83	%		42	%		33	%		36	%
Total		0	%		7	%		37	%		47	%		64	%		42	%		41	%		55	%
* of which Western Europe		6	%		-1	%		47	%		60	%		45	%		33	%		42	%		84	%
		2007												2006
Year to date		0712			0709			0706			0703			0612			0609			0606			0603
Europe, Middle East & Africa *		7,293			5,042			3,328			1,598			5,865			3,720			2,120			1,029
Americas		2,072			1,436			864			365			1,550			995			578			250
Asia		3,550			2,666			1,846			961			3,544			2,462			1,566			713
Total		12,916			9,145			6,037			2,925			10,959			7,177			4,264			1,992
* of which Western Europe		4,852			3,283			2,179			1,078			4,014			2,537			1,422			674
		2007												2006
YTD year over year change (%)		0712			0709			0706			0703			0612			0609			0606			0603
Europe, Middle East & Africa *		24	%		36	%		57	%		55	%		48	%		46	%		56	%		71	%
Americas		34	%		44	%		49	%		46	%		68	%		62	%		53	%		53	%
Asia		0	%		8	%		18	%		35	%		48	%		37	%		35	%		36	%
Total		18	%		27	%		42	%		47	%		51	%		45	%		47	%		55	%
* of which Western Europe		21	%		29	%		53	%		60	%		46	%		46	%		59	%		84	%

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: January 16, 2008