However, an increase in sales by broadening its product range towards the lower end of the market has put the squeeze on margins. While sales for the quarter rose 7.3% to 1.6bn euros ($1.9bn), net income fell 16% to 75m euros ($90.1m).
The 50-50 joint venture between LM Ericsson Telefon AB and Sony Corp does not split out its sales by sector, a disadvantage in a market where volume sales can be achieved by low-price basic phones aimed at developing markets, but the big margins are in smart phones which are moving into the mobile computing space.
Sony Ericsson is content to compete at the higher end of developing markets but said it does not have the resources to offers phones for CDMA systems, which restricts its efforts in the big US market.
The company began the year by predicting that worldwide mobile phones sales would reach 690 million in 2005, but has upped its estimate to 720 million.
