Mobile phone maker Sony Ericsson Friday reported a lowered fourth-quarter net loss, as sales of new high-margin phones and initiated cost cuts propelled its gross margin, indicating that the company may be steadily be returning on the track of profitability after witnessing several loss-making quarters.

Sony Ericsson, owned by Sweden's Ericsson and Japan's Sony Corp., revealed a quarterly pretax loss of 190 million Euros (165.2 million pounds). While, the mean forecast in a Reuters poll of
25 analysts speculated a 194 million euro loss.

Still, Chief Executive Officer Bert Nordberg, who took office in October, said that 2010 "will still be challenging as the full benefit of cost improvements will not impact results until the second half of the year. However, we are confident that our business is on the right track".

Sony Ericsson is reported to have shipped 14.6 million phones at an average selling price of EUR120 in the fourth quarter, lower from 24.2 million units at an average selling price of EUR121 a year before. Net sales fell to EUR1.75 billion from EUR2.91 billion, standing firm on market expectations.

Although, increasing competition from Apple Inc's (AAPL) iPhone as well as a wide range of handsets based on Google Inc's open operating system Android, has imposed a lot of pressure on Sony Ericsson, yet it continue to concentrate on returning to profitability led by "an exciting portfolio of mid- and high-end products".