Ericsson may experience the lowest profit drop in three years. It is estimated by 15 analysts that, in the second quarter the net income of the world’s largest maker of wireless networks fell 56 percent to 2.82 billion kronor ($472 million).

On July 18 Ericsson spokesman said that the company’s handset venture with Sony, Sony Ericsson Mobile Communications Ltd, almost had a zero profit, due to a waning demand on phones. Net income fell to 6 million euros from 220 million euros a year earlier and sales dropped 9.4 percent to 2.82 billion euros, the venture said.

In February Ericsson said the demand of telecom networks in Italian and other areas would be “flattish” this year. Jan Dworsky, an analyst at Handelsbanken Capital Markets in Stockholm said that “the global network market will be flat going forward, with limited growth next year, and competitive pressures will weigh on profit margins this year and next.”

It is said the company aims to cut annual costs by 300 million euros. Facing the challenging situation, last year, Carl-Henric Svanberg, CEO of the telecom giant, cut revenue forecasts twice. And it is announced to cut 1,000 staffs in Sweden and probably 3,000 more abroad.

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