Sony Ericsson today posted a smaller-than-expected $245 million loss and a 42 percent sales plunge in the third quarter, mainly due to delays in competing in the smartphone market.

The Japanese-Swedish joint venture said that it shipped 14.1 million units in the July-September period, up 2 percent on the quarter, but down 45 percent on the year.

Backed by parent companies Sony and Ericsson, the group said it has also secured $676 million in external financing -- strengthening its balance sheet and improve liquidity.

In April, Sony Ericsson said it would slash 2,000 jobs, on top of 2,000 jobs cut last year, to lower costs.

The company said it expected a 10 percent contraction of the global handset market in 2009 from 2008 but said the decline is slowing.

In recent years, Sony Ericsson's downward slide has been partly due to its heavily focus on music and camera phones when customers increasingly demand handsets with more robust features -- such as Apple's iPhone and Research In Motion's BlackBerry.

Hoping to win back consumers, the company has shifted its focus to a new range of new high-end devices, even integrating features such as Sony's PlayStation games console.

But the company has suffered delays getting the devices to market -- originally planned for the fourth quarter this year.

Yesterday, the world's top handset maker Nokia posted a third-quarter loss of $835 million, its first quarterly loss this decade.

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