The PS3 might be doing terribly, but other Sony products are definitely not. Sony Ericsson, the company responsible for the handsets that Sony and Ericsson together produce, stated they sold a massive 100 million handsets in 2007. That represents a significant increase from a year before. They didn't cite an increase in sales, due to the number of phones they were selling at lower price points.
Even despite those massive sales, they are still only number four in the handset market. Interestingly, their Walkman phones are their most popular, despite it being one of their higher priced products. It helps that the mobile market continues to grow as landlines fall out of favor. Their goal, they say, is to trounce Motorola and take over the number three spot.