Sony Ericsson was counting on its 12-megapixel Satio camera-phone to be a big earner this Christmas, but two of the UK's biggest phone retailers have pulled the device due to too many returns from customers.

Carphone Warehouse and Phones4U have both suspended sales of the handset, according to the Telegraph, because of what Sony Ericsson describes as a software glitch.

The handset maker says it's giving the issue its "utmost priority", but with the pre-Christmas period being one of the most lucrative for phone sales, every day the Satio isn't on the shelves of these two retailers is a problem - and worse if other retailers in the UK and elsewhere follow suit.

The news comes at the end of a tough year for Sony Ericsson, which has reported underwhelming financials and faced criticism for not moving fast enough to take on Apple in the smartphone market.

Its first Android handset, the Xperia X10, doesn't go on sale until early next year.