Ericsson joins forces with Sony in mobile venture

Ericsson, the Swedish mobile phone maker, and Sony, the Japanese consumer electronics giant, confirmed yesterday they would combine their mobile phone businesses in an attempt to create the definitive next-generation handsets for consumers.

The new company, Sony Ericsson Mobile Communications, will be held equally by its parents and will be headquartered in London with around 3,500 staff worldwide.

Kurt Hellstrom, Ericsson's president and CEO, described the venture as a "perfect match", saying: "Sony brings vast experience in consumer electronics and entertainment ­ music, pictures and games ­ and Ericsson contributes with our mobile technology lead."

Sony Ericsson Mobile Communications is expected to begin operations at the start of October and is expected to be profitable from the outset. Sony and Ericsson shipped around 50 million handsets between them last year worth around $US7bn in sales.

The venture will be responsible for product research, design and development and sales and marketing.

No decisions have yet been taken on where the handsets will be made but the business will rely on manufacturing partners.

Products out of the joint venture will appear under a new brand name, yet to be decided, although the first device is not expected to hit the shelves until next year.

Neither Sony nor Ericsson would comment on how much is being invested in the business. Each company will have four seats on the new business' board. The venture will be headed up by Katsumi Ihara, corporate executive vice president of Sony, in the role of president while Mr Hellstrom will be its chairman.

- INDEPENDENT