Sony Ericsson's Q1 results show an increase in overall device shipments of 2% from last year, but the good news end there with the average selling price dropping from 134 EUR to 121 EUR and profits dropping 42% to 181 million EUR. Sony Ericsson cite higher research and development costs (as a % of sales) along with slower sales growth of high end handsets.

Sony Ericsson's results are in range with what most people expected after an earlier warning, but do bring to an end a series of good results for Sony Ericsson. The numbers are set against Q1 2007 which was a particularly strong period for Sony Ericsson ensuring less favourable year on year comparisons.

UIQ phones are currently not a significant percentage of overall Sony Ericsson sales, although they do remain high margin items. Sony Ericsson has long stated its intention to broaden the use of UIQ across its portfolio, but progress has been slow. Instead Sony Eicsson has continued to evolve its Java Platform phones, introducing new functionality and capabilities.