After breaking even in its third quarter, Sony Ericsson has announced that it will shift its focus and make only smartphones, starting from next year.
Though it made no profit last quarter, it was an upswing from the previous quarter, which netted a 50 million euro loss.
However, last year the company gained 49 million euros in profit in the third quarter. It blames the drop in demand for less-advanced mobile phones for the lack of profits.
Sony Ericsson shipped 9.5 million phones in the third quarter, but it was a 9% fall compared with the same period in the previous year.
It says that its shift away from non-smartphones is a result of the high demand for mobile computing. Xperia smartphones now account for 80% of the company’s sales.
“We will continue to invest in the smartphone market, shifting the entire portfolio to smartphones during 2012,” said President and Chief Executive, Bert Nordberg.
Nordberg also said that Sony Ericsson, whose Xperia line runs on the Google Android system, would not rule out launching a Windows Mobile 7 phone in the future. For now, Android remains its only platform.
The Sony Ericsson announcement came just a week after the Wall Street Journal reported that Sony may make a move to buy out Ericsson’s share in their mobile phone partnership.
Experts say that the Japanese company is seeking to integrate its mobile handsets into its mobile gaming machine and tablet computer division.
Currently, Sony Ericsson operates out of Lund, Sweden.
Sony has continually proved reluctant to share its brands and assets with Ericsson on its joint venture; only this year have PlayStation games been made available on Sony Ericsson handsets.
Analysts say this is a result of the past Sony partnerships that have gone wrong, such as with CD and Blu-ray technology with its Phillips partnership. They are looking to buy Sony Ericsson fully to keep its intellectual property in-house.