Motorola's new V90 model has been on sale for several months

The firm said it had continued to win market share from rivals, including Nokia which issued its third profits warning in as many months last week.

Motorola generated sales of $8.7bn (�4.6bn),ahead of analyst expectations.

But a $900m(�485m) exceptional tax charge pushed it into the red over the period, suffering a $203m loss.

This compared to a $119m(�64m) profit in the same period last year,

Unpredictable market

Edward Zander, Motorola's chief executive, told Reuters the company could not forecast the state of the market beyond the next quarter given the heavy discounting of mobile phones which was taking place.

He said: "We know what we have got to do over the next two years, rearchitecting a lot of the processes of the company and some of our stategies."

Edward Snyder, an analyst with Charter Equity Research, said that Motorola's consumer offering compared favourably with that of Nokia.

He said: "They are continuing the momentum they had last quarter."

Consistent demand

Sun Microsystems, the troubled software producer and network computer maker, has recorded its first quarterly rise in revenues for almost three years.

Sun issued a profits warning last month and is cutting 3,000 jobs as a response to the slowdown in the global IT market.

Revenues in the quarter to the end of June rose 4.3% to $3.11bn(�1,68bn), as the company reported consistent demand for its products in both domestic and foreign markets.

Sun received almost $2bn(�1.07bn) in income following the settlement of its anti-trust suit with Microsoft in April.

Excluding this, Sun actually posted a loss in the quarter ending $795m(�429m), against a profit of $24m(�12.9m) over the same period last year.