Sony Ericsson unveils iPhone rival

Struggling phone maker Sony Ericsson unveiled its answer to Apple's iPhone.

The new "flagship" Satio phone combines a 12.1 megapixel camera with a Walkman to create "the best of both our products", said Nathan Vautier, managing director of Sony Ericsson UK.

The world's fourth-largest maker of mobile phones is launching the phone, along with two others, to help stall a slump in mobile phone sales.

Worldwide mobile phone sales fell by a 8.6% in the first quarter of the year, according to research firm Gartner.

Sony Ericsson posted a £293 million loss in that time and demand for its handsets fell by around 35%, which the company attributed to the global financial crisis.

Gartner said "mid-market" phones, traditionally ones sold by Sony Ericsson, suffered the deepest dip in sales.

The market for "smartphones" such as the iPhone and the Nokia 5800 was growing, it said.

The new Satio is also a "smartphone".

It features applications for websites such as YouTube and Facebook and it also boasts free access to Hollywood movies and a touch-screen keypad.

Mr Vautier said the Satio and the other new phones, the Aino and Yari handsets, "revolutionise" the mobile phone gaming and audio experience by merging communication and entertainment.

The Yari phone is focused primarily on games and allow users to play using hands-free technology in a similar way to Nintendo's Wii console.

While the Aino handset can be connected to a Playstation 3 to enable users to access media content on their gaming console from their mobile.

The products are set to hit the high street later this year.