Further Sony Ericsson Break-Up Rumours

The intermittent rumours that Sony is looking to extract itself from its mobile phone joint venture with Ericsson have resurfaced again following a news report in a German news magazine. The magazine, Manager-Magazin, a division of broadsheet publication, Der Spiegel reported that Sony has expressed an interest in buying out the Ericsson stake and taking full ownership of the firm.

Sony is reported to be in talks with banks to secure the financing for the buyout - although its own financial problems could make it difficult to win over the banks in the current economic climate.

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.

An Ericsson spokesman declined to comment on market rumours - although this is not the first time that tales of friction between the co-owners have emerged.

The firm faced one recent setback - as an attempt to license Sony's Playstation brand to replicate the success of its Walkman phone franchise was apparently rejected by Sony. 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 the venture was to combine Sony's consumer electronics expertise with Ericsson's wireless technology.

On the web: Manager-Magazin (via Slashgear)

Posted to the site on 18th March 2009