The fourth quarter witnessed very strong sequential market growth which Sony Ericsson matched, resulting in a record quarter in terms of volumes, sales and net income for the company. The second half of 2005 was particularly strong due to the success of hit model phones in both the imaging and music product categories. A highlight of Sony Ericsson’s year was the global success of Walkman branded music phones such as the W800, W600, W550 and the W900, which have established Sony Ericsson at the forefront of expanding consumer choice in how people enjoy digital music on the move. Since the first Walkman phone was launched in volume in August, Sony Ericsson has shipped 3 million Walkman branded units.

During the fourth quarter Sony Ericsson announced an approximately $14 million investment to purchase a controlling 64.5% stake in Beijing Suohong Electronics Co, Ltd (BSE) from Sony China, in order to strengthen its in-house manufacturing processes. Sony Ericsson’s majority ownership in BSE will be consolidated into Sony Ericsson from the first quarter of 2006.

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