Sony Corp. and LM Ericsson have announced plans to merge their mobile phone divisions in an effort to revitalize their struggling handset businesses. The new company Sony Ericsson Mobile Communications will be a 50-50 partnership located in London, England, employing about 3,500 people worldwide.

Beginning October 1^st of this year, the new company will be responsible for creating its own brand of products, more than likely, smartphones and communicators, distinct from the parent companies. This will involve product research, design and development, as well as marketing and sales, distribution and customer services. The first products are expected to be debuted during the first half of 2002.

"We are a perfect match. Sony brings vast experience in consumer electronics and entertainment—music, pictures, and games—Ericsson contributes with our mobile technology and relationships with mobile operators. This is an ideal partnership for the growing market for 3G and Mobile Internet." said Kurt Hellstrom, president and CEO of Ericsson.

Commenting on the market opportunities for the new venture, Sony’s president and COO Kunitake Ando said, "The mobile phone industry is fast moving toward multi-media broadband and poised to grow significantly in the years to come. Millions of consumers will require mobile handsets that can handle rich content such as movies, pictures and games smoothly and effortlessly, regardless of location. Our collaboration with Ericsson, hold significance for us in creating an ubiquitous value network that is always connected, on demand and interactive."

Even though some analysts are doubtful the new company can compete against Nokia and Motorola, others appear more hopeful. They believe that the combination of their brand names and the demand for mobile entertainment may open doors in both the Japanese, where Sony has a strong presence, and the European and North American markets, where Ericsson has a foothold.

For more information: http://www.ericsson.com/press/20010424-1130.html