Dick Komiyama’s comments came after the Swedish-Japanese joint venture announced losses of €213 million ($301 million), compared to a €6.0 million profit a year ago.

“As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson,” Komiyama said in a statement.

The results were, however, a slight improvement from those in the previous quarter when the company posted losses of €293 million.

Komiyama said Sony Ericsson would aim to return to profitability and growth “as quickly as possible” through its “ongoing cost savings program.”

For the period from April 1 to June 30, the company posted sales of €1.68 billion, down 40 percent from 2.82 billion for the same period last year.

Sales of its handsets are also on the slide.

Sony Ericsson said it had sold 13.8 million handsets in the second quarter, giving the company an estimated five-percent share of the global market.

That represents a drop the same time in 2008 when it sold 24.4 million handsets worldwide.

Industry watchers say Sony Ericsson has been overtaken by the success of the new “smartphones”, such as the Blackberry and Apple’s iPhone, which feature high-speed internet access.

The Swedish-Japanese company had previously built its reputation and growth on premium products until some two years ago when it moved towards making more low-cost handsets.

It was a strategy devised to win sales in emerging markets such as China and reduce its reliance on Europe and the US.

Sony Ericsson, the fifth largest manufacturer of mobile telephones in the world by market share, is not listed individually on any stock exchange as its accounts listed under parent companies Ericsson and Sony.

Sony Ericsson was not the only mobile handset maker to announce falling sales and profits on Thursday. Finland’s Nokia reported a 66-percent collapse in quarterly profit to €380 million.