Sony Ericsson unveils its first Android phone

Android has gained a lot of traction this year as handset vendors look for ways to beat Apple's iPhone. Loss-making Sony Ericsson, the world's fourth largest handset maker, has suffered since 2008 from a lack of attractive high-end models in its offering, and saw overall third-quarter sales shrink 45 percent year-on-year.

The X10 will have a 4-inch-wide touch screen, use Qualcomm's Snapdragon processor, and come with an 8.1 megapixel camera.

Sony Ericsson's current top model Satio, with a 12 megapixel camera, has just gone on sale and the announcement could hurt sales in the key sales period ahead of year-end holidays.

"I think some consumers will think about waiting until the first quarter to get their hands on the X10 rather than get a Satio for Christmas," said Gartner analyst Carolina Milanesi.

"It was a difficult call to make trying not to negatively impact products like the Satio ... while at the same time announce something that will persuade consumers not to go to another brand," Milanesi said. (Reporting by Tarmo Virki; Editing by Simon Jessop and Dan Lalor)