Lower sales volumes, however, disappointed market watchers who had hoped for a rise. The LM Ericsson and Sony Corp. joint venture shipped 10.4 million units in the July-September period, down 26 percent year-on-year and 5 percent from the quarter before.

The company’s profit of 49 million euros ($70 million), which compared with a year-earlier loss of 164 million euros, was helped largely by lower costs, the result of a savings program it launched in 2008.

Revenues, meanwhile, fell slightly to 1.6 euros billion from 1.62 billion euros, as a 34 percent jump in the average selling price to 154 euros could not make up for the lower shipping volumes. Selling prices were down 4 percent compared with the second quarter.

“Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50 percent of our total sales,” CEO Bert Nordberg said, adding his company had launched its Android-based Xperia models in new markets, including both China and the US in the quarter.

“It is our ambition to become the global number one handset provider on the Android platform,” he said.

Sony Ericsson said its unit base market share remained flat compared with the second quarter — at around four percent — while the value market share is at around 6 percent.

The group also kept unchanged its forecast for units in the global handset market for 2010, saying it expects slight growth.

Helena Nordman-Knutson, an analyst with Ohman Fondkommision in Stockholm, said the report was overall worse-than-expected, with the volumes being the main disappointment.

“The competition out there is extremely tough right now and you have to have new phones all the time,” she said, pointing to launches by Samsung as well as Apple Inc.’s new iPhone 4.