Sony Ericsson who like Nokia is struggling to make sales in the highly volatile mobile phone market is now looking at the possibility of selling Microsoft Windows based phones, which could be a blow for Sony their 50% partner, who also makes the Sony PlayStation.Last week it emerged that Sony, is looking to buyout their stake in the Sony Ericsson company, who on Saturday reported a major decline in sales in markets like the USA, Australia and Europe. 

In the USA, sales fell 45 percent compared with the year-ago quarter, with year-to-date US sales falling 28 percent.

No sales declines for Australia were reported, however insiders are claiming that sales in Australia have fallen more than 20% during the past 12 months.

The latest sales performance followed a second quarter in which the company slipped back into the red following five consecutive quarters of net profits.

The problem for Sony is that Microsoft is heavily promoting the Xbox gaming functionality of their new Mango OS which is set to appear in several Windows based phones in coming weeks.

The company said at the weekend that they would shift its entire portfolio to smartphones in 2012.

In the third quarter, the company’s Android Xperia smartphones accounted for more than 80 percent of sales.

Sony Ericsson president/CEO Bert Nordberg said during a conference call “For the moment, we see Android as a better choice for us. We have not closed the door [on Windows Phones].” In fact, he said, “we have seen some tablet version of Windows 8, and it looks interesting.”

For now, however, Windows Phone needs some improvements in “a number of services and applications,” he said.

For the quarter, sales were down 1 percent to US $2.2 billion and down for the year to date by 18 percent to 5.44 billion. The number of units shipped fell 8.7 percent from the year-ago quarter to 9.5 million.