This news cannot be good for the smartphone market. Sony Ericsson's Q2 profits have fallen by a whopping 97%. The company knew their profits would fall in the second quarter but nobody predicted a 97% drop.

The company has been placing their hopes in the upcoming Xperia X1 Windows Mobile smartphone but they'll need much more than one device to pull themselves out of this one. With iPhones and BlackBerrys flying off the shelves Sony Ericsson had better come up with something else.