Sony Ericsson has overtaken Samsung to take third place in the mobile phone market, in terms of revenues, after posting a threefold rise in net profits for the final quarter of 2006.

Bucking the trend towards shrinking margins seen at rivals, strong demand for Cyber-shot cameraphones and Walkman digital music phones helped Sony Ericsson to overtake Samsung in terms of mobile sales in the fourth quarter.

Sony Ericsson still lags its Korean competitor in terms of shipped units, but is closing the gap quickly.

Sony Ericsson said shipments in the quarter rose 61.5 per cent to 26 million, compared with Samsung's 32 million. A year ago Sony Ericsson sold only half as many phones as Samsung. However, both groups will be eclipsed next week by Nokia, the industry leader with a 30 per cent market share, which is expected to report sales of more than 100 million units.

The joint venture between Sweden's Ericsson and Japan's Sony also increased the average price it received per handset to €146 from €142 a year earlier. In contrast, Motorola, the second-largest manufacturer, recently gave warning over profits after its selling prices plunged as the company fought to maintain market share. Samsung was also hit by falling prices and last week reported an 8.5 per cent fall in group profits for the three months to December 31.

Miles Flint, president and chief executive of Sony Ericsson, said that as an industry "welterweight" his company had no interest in a bruising price war with Nokia and Samsung. However he added that Sony Ericsson would launch a string of new models next month, including an ultra-thin handset aimed squarely at taking on Motorola's popular but loss-leading RAZR.

Net profits at Sony Ericsson hit €447 million (£293 million), in the three months to December 31, up from €144 million last year. Revenues rose to €3.8 billion, from €2.3 billion, beating the €3.3 billion expected by analysts. Pre-tax profit rose to €502 million from €206 million.

Mr Flint also shrugged off suggestions that Apple’s recently announced iPhone product would woo consumers. The launch of the gadget last week caused shares in traditional mobile makers to dip across the board. "We fear none of our competitors," he said.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax