Mobile phone maker Sony Ericsson has reported a quarterly profit, the first time it has done so since being created in October 2001.
Sony Ericsson's market share is stuck at 6%
Sony Ericsson was formed when Swedish telecoms group Ericsson spun off its loss-making mobile handset business to focus on telecoms networks.
It was planned as a marriage of the Swedish group's engineering skill with the Japanese firm's talent for chic innovation after Ericsson's designs flopped in the notoriously fashion-driven handset market.
The parent companies put great pressure on their joint venture to reach profitability quickly or face closure - and until the latest quarter, it had managed only a string of losses and one quarter in which it broke even.
Sony Ericsson reported a pre-tax profit of 39m euros ($45.7m; £27.2m) for the third quarter of 2003, which compared with a loss of 116m euros in the same period of 2002.
It lost 102m euros in the second quarter of 2003.
The company said it "intends to be profitable in the second half of 2003".
Higher sales volumes helped Sony Ericsson to climb out of the red.
But the joint venture acknowledged that profits growth is threatened by customers' preference for its cheaper models.
"Volume and sales are expected to continue to grow during the fourth quarter, but due to an increased proportion of lower priced models in the product mix we anticipate it may be difficult to sustain the current level of profitability in the next quarter," the firm said.
It shipped 7 million phones in the three months from July to September, compared with 5 million a year earlier and 6.7 million in the second quarter.
Sales were worth 1.3bn euros, up from 869m euros a year earlier and 1.1bn in the April to July period.
Mobile phone shipments are strengthening in general.
Some mobile phone makers, including Siemens and Motorola, have recently trumpeted increased handset sales and said their market shares are growing.
But there was no sign of an improvement in Sony Ericsson's global market share, which remained unchanged at 6%.