SONY Ericsson has reported a €167m (£146m) fourth quarter loss.
This compares with a loss of €187m in the same period last year.
The market has been hit by the global economic downturn – with cash-strapped customers putting off some consumer purchases.
The company said it expected unit volumes in global handset sales to have fallen 8 per cent in 2009.
Sony Ericsson reported a net loss of €836m for the whole year – against a profit in the previous year of €73m.
The market has been adversely affected by the global economic downturn as consumers hold off decisions to purchase new technology in mobile phones.
Meanwhile the company has slashed costs a reduction in costs in an attempt to offset the plunging sales.
In 2008, the company introduced a cost-cutting plan and it aims to cut costs by €880m.