This column was originally published on RealMoney on Oct. 17 at 3:07 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.Sony Ericsson logged remarkably strong 17% sequential growth in phone units in the third quarter, going from sales of 11.8 million phones in the second quarter to 13.8 million in the third. At the same time, the average sales price (ASP) rose by a robust 12 euros. This combination of rising volume and sales prices is rare. It may be early evidence that Western consumers are flocking to high-end models with rich features and hefty retail prices. This, in turn, would be very good news for the component industry. The mobile phone market is often regarded as swinging like a pendulum between periods dominated by new technologies and those ruled by design innovation. Sony Ericsson typically excels during periods when technological innovation is central and sometimes struggles when consumers are swayed mostly by fashions. Sony Ericsson's second quarter was surprisingly tepid compared to the third quarter. Could the strong consumer response to the cutting-edge novelties SE launched in late summer indicate strong demand for new high-end mobile products? In the second quarter, the company's global market share actually slipped marginally as Nokia ( NOK) and Motorola ( MOT) dominated with models that featured relatively boring specifications. But during the third quarter, something happened -- Sony Ericsson added a spectacular 2 million units of sales. This was more than a million above what most observers expected, and even more importantly, the sales boom was driven by expensive models like the W-800 music phone and the K-750 camera phone. As a result, the average sales price of Sony Ericsson models rose from 137 euros to 149 euros. Sony Ericsson has seen quarterly ASP swings of this magnitude before. ASP rose about $10 from the second quarter to the third in 2001, fell more than $10 in the third quarter of 2002, and rose about $20 during the autumns of both 2003 and 2004.
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