The sales at Sony Ericsson are at the receiving end of the blows from the economic crisis worldwide, resulting in widening losses. The fourth-quarter US$247 million losses at the company are not only many times more than its third-quarter losses, but are also a nosedive from its $495 million profit in the same quarter the earlier year.

Even the release of the sophisticated Xperia X1 and an 8.1-megapixel camera phone could not turn the tide over for the company, as it sold 6.6 million lesser phones compared to the same period figures of the previous year.

Other than the faltering global economy - due to which potential buyers are postponing the upgrading of their handsets - the sales at Sony Ericsson have been hit harder than rivals Samsung, Motorola and Nokia, because it lacks a large portfolio of entry-level phones for sale in up-and-coming markets like China.

In a statement, Sony Ericsson president Dick Komiyama said: "In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn. We foresee a continued deterioration in the marketplace in 2009, particularly in the first half."

Analysts too are just as pessimistic as the company. It is being felt that results that Sony Ericsson has depicted paint a murky picture, especially in the short term. Nonetheless, with its work on in some long-range projects, like its recent tie-up with Open Handset Alliance, an Android-powered smartphone will likely be unveiled in the second half of the year.