Sony Ericsson's handsets are selling at nearly double last year's rate.

Pre-tax profit in the period May to June was 113m euros ($139.6m; �75.4m), after a loss of 102m euros a year ago.

The world's fifth-biggest mobile maker said the increase was thanks to strong demand for camera phones, and revised up its global handset sales forecast.

Sales of phones were up to 1.5bn euros, from 1.1bn euros a year earlier, up 34%, and ahead of market expectations.

The company also announced three new phone models, a "smartphone" for "mobile business professionals", and two new camera phones.

The news came on the day market leader and rival, Nokia, announced a drop in quarterly sales compared to 2003, and a loss of market share.

'Strong demand'

The joint venture between Japan's Sony and Sweden's Ericsson was born in April 2001, and has been challenging leading mobile phone makers such as Nokia, Motorola and Siemens.

"These results reflect continued strong demand for our style-oriented line-up of imaging and multi-media phones," said Miles Flint, president of Sony Ericsson.

"The company has established a solid basis for sustained growth going forward.

"In addition to reporting successively improving profitability, we have maintained momentum in an increasingly competitive market environment."

Mr Flint said he expected the average selling price to rise in the second half of 2004, boosted by the three new models.

'Critical area'

The firm is to concentrate on imaging, audio, video and gaming in mobile phones as well as 3G services, Mr Flint said.

"Clearly the evolution of the market to 3G is a critical area for us to be addressing," he said.

He added that the firm's market share was flat at 7% in the second quarter against the first quarter.