Sony Ericsson continued to post losses in its fourth quarter on plummeting sales of its handsets. The company shipped just 14.6 million units in the fourth quarter ended Dec. 31, a 40 percent drop from last year’s shipments. Revenue also fell 40 percent, hitting $2.47 billion.

The company, a 50-50 joint venture between Sony and Ericsson, blamed the decrease on an industry-wide global sales slump and a unexpected shift toward mid-range touchscreen devices.

“2010 will still be challenging as the full benefit of cost improvements will not impact results until the second half of the year, however we are confident that our business is on the right track,” company President Bert Nordberg said in a statement.  

Sony Ericsson will continue to cut costs over the next year as part of a program to reduce its operating expenses. The company laid off about 2.500 people in 2009.

The company said it expects the global handset market to grow slightly over the next year. Sony Ericsson’s 5 percent market share remained flat in 2009. The company estimates the global handset market shrank by 8 percent to 1.1 billion units in 2009.

Sony Ericsson says it will continue to focus on mid- and high-end, entertainment-focused handsets. The company recently announced the creation of its Android-based handset, the XPERIA X10, which features a 1 GHz Snapdragon chip, 4-inch capacitive touchscreen and 8.1-megapixel camera.