If Sony Ericsson were capable of self-fulfilling prophecies, it would wish it could take back its ominous profit warning issued in late June. The company said it would break even in the second quarter due to disappointing European sales of its mid and high-end mobile phones, but even that turned out to be wishful thinking as Sony Ericsson on Friday posted a staggering 97 percent drop in Q2 profits. To help weather the financial storm and reduce operational costs, the mobile phone maker plans to cut 2,000 jobs "within the next 12 months."

Sony Ericsson only shipped 24.4 million units in Q2, compared to Nokia's 122 million handsets in the same period, who on Thursday announced better-than-expected earnings. Relief doesn't appear to be in sight either, as SE indicated "challenging market conditions" would remain through the rest of the year.

Image Credit: Sony Ericsson