Sony Ericsson have announced some disappointing profits so far this year, but can things pick up before the end of the year? And if they are to pick up, what mobile phones will change Sony Ericsson's fortunes?

Background - why is Sony Ericsson losing money?

Before we can look at how Sony Ericsson will pull themselves out of this financial slump, you need to understand WHY they're in the slump in the first place. The problem has its roots back in the days of the Sony Ericsson K750. That phone was a groundbreaker, it blew away the other mobile phones on the market, with a 2 megapixel camera, beautiful screen, ace music player, and memory card support. It was such a quantum leap over its predecessor, the Sony Ericsson K700, that it rightly became one of their best selling mobile phones ever. And then something happened. At the same time as that, Sony Ericsson released the W800. It was basically identical to the K750, but with one crucial difference. It was the first Walkman mobile phone, and it showed the first hints of what would later become Sony Ericsson's entire strategy: segmentation.

So, we'd get a mobile phone in the, for example, Walkman line, and then Sony Ericsson would make another version of that mobile phone, in a different product line. So, for example, the W950 and M600 shared the same base model, with a few differences between the two. Sony Ericsson pulled the same trick with the P1 and W960. Or the K770/T650. It may well be that this was an idea that Sony Ericsson nicked from Nokia, but the problem is, Nokia do it a lot better. With a whole raft of similar mobile phones, Sony Ericsson on the other hand, seemed to have stagnated a bit, their mobile phones not offering the same pizzazz that they used to, or that Nokia mobile phones do now. There's nothing in Sony Ericsson's portfolio that truly makes people go, 'WOW!'

Well... there wasn't... but there soon will be.

Phones of the future - Sony Ericsson C905 and the next-gen Walkman

You see, there are two mobile phones that, to my mind, will help turn round Sony Ericsson's fortunes more than any other. First up is the , which has the unique claim to fame of being the first 8 megapixel camera phone to announced for the UK. And what a phone it is, with that massive 8 megapixel camera, Cyber-Shot technology, WiFi, GPS and HSDPA. It's a massively powerful mobile phone, and I honestly reckon it'll sell by the bucketload. It's not what you'd call a smartphone though, and for that, we need to turn to one of the other mobile phones in the arsenal, one that's so new, so mysterious, and so secret (but so blatantly going to happen), that it doesn't even have a name yet. It will be, though, Sony Ericsson 16Gb Walkman phone, and with a full touchscreen, it's blatantly obvious what phone it's going to be aiming for. Yup. The iPhone 3G. That, I predict, will be the big phone that changes things for Sony Ericsson in 2008.

Even if we don't know what it looks like...