Sony Ericsson sees market challenges hurting 2Q

Wireless device provider Sony Ericsson said Friday it sees continued market challenges impacting sales and profit in the second quarter.

Sony Ericsson is a 50/50 joint venture between Swedish telecom equipment maker LM Ericsson Telephone Co. and Japanese electronics firm Sony Corp.

The company said it expects to ship about 24 million phones during the quarter with an estimated average selling price of 115 euros ($181.17). Gross margin is expected to decline both year-over-year and sequentially.

Before taxes, Sony Ericsson is forecasting it will approximately break even in the quarter.

Sony Ericsson reports second-quarter results on July 18.

The news comes on the heels of disappointing results from Treo smart phone maker Palm Inc., which Thursday reported a fiscal fourth-quarter loss and lower revenue which missed Wall Street expectations. The Sunnyvale, Calif.-based company said sales of cheaper Centro phones are strong, but higher-margin Treo sales have slowed.

Blackberry maker Research In Motion Ltd. also this week reported quarterly profit which missed analysts expectations.

American Technology Research analyst Mark McKechnie said last week general market sentiment on broad-based handsets "is a bit negative now."