Mobile phone maker Sony Ericsson increased its market share in the second quarter, the company said, although pretax profits were just below forecast in the highly competitive market.
A two-megapixel camera phone and a mid-market 3G handset were among the offerings which helped win more customers for the joint venture between Japan's Sony and Sweden's Ericsson, which has been broadening out from its previous concentration on the high end of the market.
The group also reiterated it had upgraded its 2005 market outlook to more than 720 million handsets from a previous 690 million.
Sony Ericsson vies with Siemens as the fifth or sixth biggest phone maker behind LG Electronics, with deliveries in the second quarter of 11.8 million phones, 14 per cent more than in the same period last year.
Samsung, the world's third biggest mobile phone maker behind Nokia and Motorola, earlier said its Q2 shipments rose 7.5 per cent.
"We feel that we gained momentum and market share," Sony Ericsson's President Miles Flint told Reuters, adding that the market had grown faster than most had expected.
He said the group's market share in the quarter had risen to seven per cent from six per cent in the first three months of the year.
It made a second-quarter pretax profit of €87 million, just below the average forecast given in a Reuters poll of analysts of €91.5 milliom. Sales were €1.61 billion, which compared with an average forecast of €1.52 billion.
The pretax profit was up on the first quarter's €70 million, but down on the €113 million made in the same period of 2004.
The average selling price (ASP) of its phones was around €137, Mr Flint said. "We don't see any big changes going forward."
Sony Ericsson is the second mobile phone firm to report Q2 results. Samsung earlier said margins were weaker at its handset business but expected volumes and prices to rise in the third quarter.
Samsung is targeting 100 million mobile phone sales this year, up 16 per cent from a year ago.
Mr Flint said price pressure in the market remained relentless and that the group's strategy was to keep differentiating its products from competitors and adding applications.
The group will in the third quarter ship its Walkman phone, which builds on Sony's brand of portable music players.
It has also announced a mid-tier clam-shell phone and a cheaper model aimed at Asia and eastern Europe.
"We will make further product announcements during the second half. The Walkman will start shipping in the earlier part of the third quarter," Mr Flint said. Helsinki-based Mandatum analyst Erkki Vesola said it seemed from the report that the pretax margin was at the same level as is in the first quarter, which he said was unsatisfactory.
But he added: "The volume growth that they showed versus Q1 is promising, and the flat ASP is also a positive".
Helena Nordman-Knutson, analyst at brokerage Ohman, said the report was in line with her expectations. For the second half of 2005 the group would have a wider range of products, she said.
"The future looks better but Sony Ericsson is still a small player. A market share of 10 per cent is a critical level over time," she added.