Sony Ericsson reported loss of 187 million euro or $246 million in the fourth quarter, as the economic downturn lowered consumer spending.

The company had a net loss of 73 million euros or $96.7 million in full 2008 fiscal year. In 2007 it recorded a profit of 1.1 billion euros.

The mobile-phone manufacturer acknowledged the quarter was challenging and forecasted worse circumstances for the market in 2009, especially in the first six months of the year.

Sony Ericsson's net sales for the fourth quarter of 2008 dropped 23 percent to 2.91 billion euros. For the full year, sales were 11.2 billion euros, down 13 percent

Sony Ericcson is a joint venture of Sony Corp of Japan and Sweden's Ericsson.