Carphone Warehouse and Phones 4U have suspended sales of Sony Ericsson’s flagship Satio mobile phone after a software glitch resulted in unusually high levels of customers returning the phone to the stores.

Some customers who purchased the Satio found that when they tried to access certain applications, the handset powered down. The issue is related to software on the phone and could not be resolved via an over-the-air patch. Sony Ericsson said that a “fairly low” number of customers have returned the phone relative to the number of Satios that have been sold.

Richard Dorman, senior marketing manager at Sony Ericsson, said that the company expects to have resolved the problem by Christmas and that it will not suspend its high-profile marketing campaign, which features people taking photos of each other on spacehoppers using the phone’s 12 megapixel camera, despite the Satio being unavailable in the country’s major independent retailers.

The decision to suspend sales of the Satio represents a major body blow for Sony Ericsson in the run up to the crucial Christmas trading period.

Ben Wood, an analyst with CCS Insight, said: “This is the last thing Sony Ericsson needs right now. It’s a disaster.” He argued that the Japanese-Swedish company has struggled with quality issues in the past and that software problems are becoming more prevalent for mobile phone makers, which are under pressure to rush out highly complex handsets to remain competitive. Handsets such as the Nokia N97 and the original Blackberry Storm suffered teething problems after launch.

The issue is particularly frustrating for Sony Ericsson as the Satio had been selling well, with customers attracted to the high-quality camera. Mr Dorman said: “Sales of the product have been very strong and we expect them to remain strong once the problem has been fixed.” He added that the handset will still be available from its mobile phone partners Vodafone, Orange and T-Mobile.

Both Carphone Warehouse and Phones4U said they would offer a new phone to customers exchanging a faulty Satio. A spokesman for Carphone Warehouse said: “From time to time we experience issues with new handsets, and their software, which may result in a customer experience that is below our usually high standards.” Both retailers said they will work “very closely” with Sony Ericsson to resolve the issues and restock the popular handset as soon as possible.

Sony Ericsson has struggled over the past 18 months and reported a EUR199 million loss in the third quarter. Its market share has dwindled to around 5 per cent and has cut 2,000 jobs this year on top of 2,000 job losses last year. It hopes to return to profitability next year with the launch of the X10, its first handset based on Google’s Android operating system.

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