Mobile phone manufacturer Sony Ericsson announced earlier today that its losses over last year’s fourth quarter reached €187 million ($246 million). What makes this situation even more serious is that the profit recorded in 2007 was of €373 million, putting a huge gap between the result of the two years. One of the main reasons was the fast decreasing demand of consumers, trend which is expected to continue in 2009, particularly in the year’s first half.

"We foresee a continued deterioration in the marketplace in 2009, particularly in the first half," said company President Hideki Komiyama in a recent statement, adding that 2008 was a tumultuous year.

These financial issues are not experienced just by Sony Ericsson, as Nokia also announced that it expects the fall of global handsets in 2009 by more than 5 percent from the year before.

Sony Ericsson shipped out about 24 million phones in October, November and December, almost 7 million less than 2007’s 30.8 million. Its net sales fell 23% to €2.91 billion, from €3.77 billion, and the average selling price for the company’s handsets decreased to €121 from €123. The company announced that its estimated market share for the fourth quarter came in at about 8%, down from 9.4% in the fourth quarter of 2007, but largely unchanged from 8.1% in the third quarter of 2008.

"As expected, the fourth quarter continued to be very challenging for Sony Ericsson," the company’s officials said.

Sony Ericsson’s officials prepared a $395 million cost savings plan, which is curently in its first phases and so far, according to official releases, is running on track.