Sony Ericsson launches new entry-level phones

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STOCKHOLM (Reuters) - Mobile phone maker Sony Ericsson said on Monday it was launching three entry-level phones as it seeks to broaden its portfolio beyond the high-end handsets for which it is best known.

The group owned by Ericsson and Sony said in a statement that the new phones were the J220 and the J230, which has a radio, as well as the Z300 clamshell handset.

Per Alksten, the Nordic product market chief, told Reuters that the phones would cost around 1,000 Swedish crowns (US$122.2).

This would compare with the group's average selling price in the third quarter of 149 euros (US$174.4).

The group's third quarter sales were boosted by its Walkman phone, a high-end handset builds on Sony's brand of portable music player.

Analysts noted that in launching cheaper phones Sony Ericsson had to balance profitability with volumes.

"So far, no one apart from Nokia has shown that you can produce cheaper phones with high profitability," said Ohman analyst at Helena Nordman-Knutson.

In general, it was positive to launch lower-end phones as they were in demand in fast-growing emerging markets, she said.

Another analyst said it depended on how Sony Ericsson manufactured its phones.

"They might have a good contract with a contract manufacturer and can generate a reasonable sales margin," said the analyst.

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