Sony Ericsson has managed to cut its financial loss in the last three months.
The latest results from a joint venture between the Sony and the giant Swedish telecommunications company Ericsson, show losses of 167 million euros ($US235 million) for the quarter.
This compares with a loss of 187 million euros in the same period last year.
The BBC reports the mobile phone maker has been suffering from lower sales, although this has been offset by its cost cutting programme.
The company said it expected unit volumes in global handset sales to have fallen 8% in 2009.
For 2009 as whole, Sony Ericsson reported a net loss of 836 million euros, against a profit in the previous year of 73 million euros.
The BBC reports the market has been adversely affected by the global economic downturn as consumers hold off decisions to purchase new technology in mobile phones.
Sales at Sony Ericsson over the quarter fell 40%.
The company has also been caught off guard by the switch to touchscreen, or smartphones, which have been experiencing global growth, bucking the trend in the overall sector.
Offsetting the decline in sales was a reduction in costs, although these were not as much as expected.
The company introduced a cost-cutting plan in 2008 and aims to cut costs by 880 million euros. The full effect of the measures is expected in the second half of this year.