In a statement, Sony Ericsson president Hideki Komiyama said his company estimates restructuring charges to "be of the same magnitude as our reduction in operating expenses."

"Challenging market conditions are expected to prevail for Sony Ericsson for at least the rest of 2008," the company said, "in particular for the third quarter."

The average selling price for Sony Ericsson handsets fell in the second quarter to 116 euros, or $185, from 125 euros, because of a wider range of cheaper phones in its product portfolio and price competition on more expensive phones.