19 March 2009

Is Divorce On Sony Ericsson's Horizon
Ericsson To Sell Its Stake In A Joint Venture!

There is lot of buzz over the past couple of months that venture between Swedish Ericsson and Japanese technology giant is on the end and that Swedish telecommunications group Ericsson is planning to withdraw from the 'common' mobile phone business with partner Sony to take over.

German manager magazine reports suggest that Ericsson is looking to sell back their share of Sony from Sony Ericsson. It's certainly been a difficult year; Ericsson’s core business had so far hardly been affected by the global economic slowdown.

Even after cutting 8,000 jobs and closing 10% of factories, losses over the 2008 fiscal year were in the billions and Swedish company claims that loss is caused by dramatic drop in contributions from its Sony Ericsson joint venture, disappointing product launches and bad financial results.

However, an Ericsson spokesperson declined to comment on the current rumors, saying that the company does not discuss speculation.

When Sony and Ericsson merged as Sony Ericsson, Sony brought its design and media competence into the new venture while Ericsson brought is technical know-how and both together created some exciting phones, except the not so successful Symbian-based UIQ smartphone line.

The Sony Ericsson partnership has produced several rumors of in-fighting between the companies, particularly in the case of the much-rumored PSP phone. Sony has apparently refused to grant the PSP license to Sony Ericsson, supposedly until the “product proposition lives up to brand promise”.