Sony Ericsson is in strife after net profits for the last quarter crashed 97%. The European manufacturer of mobile phone is finding it hard to compete up against the Apple iPhone, as well as new mobile phone products from Samsung and LG.

The Company saw profits fall to only $9.5 million from about $348 million during the same period last year. Sales also slipped to $4.46 billion from about $4.9 billion last year.

According to Reuters, overall, the company posted an operating loss of $3.1million for the quarter, and it shipped 24.4 million units. By comparison, Nokia announced that it had shipped 122 million handsets during the same period.

Because of the fall in profits Sony Ericsson plans to cut 2,000 jobs to save $474 million annually.

"We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth," Sony Ericsson CEO Dick Komiyama said in a statement. "The measures we are taking are aimed at becoming a faster, more agile, and more cost-efficient organization that can continue to create innovative products that excite consumers."

About a year ago, Sony Ericsson was the world's fourth-largest seller of mobile handsets, and it was nipping at Motorola's heels for the third slot. But it now ranks behind Nokia, Samsung, Motorola, and LG Electronics.