Sony Ericsson Denied Playstation Brand - Expects Full Year Loss in 2009
Published on: 18th January 2009
Despite posting a loss for 2008, Sony Ericsson expects that new products and ongoing efficiencies will help the firm to return to profitability in the second half of this year. The firm has typically launched 30-40 new handsets each year, but will cut that to somewhere in the region of 25-32 phones this year.
"To find new products meeting consumer demand means we can claim higher margins, and that's what we have planned for 2009, second half," chief executive Dick Komiyama told Dow Jones Newswires.
Komiyama warned though that the general economic climate would make the first half of the year a difficult one for the firm, and that the company will probably post a loss for the full year.
The company, which spent €1.38 billion (US$1.8 billion) on R&D in 2008 will continue investing on new technologies and will including imaging and games as well as music services.
However, the firm has faced one recent setback - as an attempt to license Sony's Playstation brand to replicate the success of its Walkman phone franchise has apparently been rejected by Sony.
Sources told the UK trade publication, Mobile Today that the refusal to sanction the brand on the handsets in December has prompted a fallout between Sony and the mobile phone joint venture.
Several sources close to the matter claimed Sony executives told colleagues at Sony Ericsson that it would only license the PlayStation brand if and when Sony makes handsets independently - effectively pushing for an exit from the joint venture with Ericsson.
Last August, Sony's CEO Howard Stringer told Die Welt, that the two companies need to reform their cooperation otherwise the joint venture would fail.
Asked if the companies could break up the joint venture, he commented "it's certainly been a difficult year but buying out a partner is never an easy thing."
Sony Ericsson was established in 2001 by Sony and Ericsson to make mobile phones after a fire in March 2000 at a Philips factory in Albuquerque, the sole supplier of semiconductors to Ericsson nearly crippled the company. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector.