Sony And Ericsson To Put More Money Into Mobile-Phone Venture - InformationWeek

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Sony And Ericsson To Put More Money Into Mobile-Phone Venture

Companies hope to stem unit's losses by injecting more than $320 million.

STOCKHOLM, Sweden (AP) -- LM Ericsson and Sony Corp. said Wednesday they will inject 300 million euros ($324.6 million) into their joint mobile phone venture in a bid to stem the unit's losses.

The venture, Sony Ericsson, has steadily lost money since it was established 15 months ago, and Ericsson executives had indicated last year that they planned to put more funding into it.

Stockholm-based Ericsson and Tokyo-based Sony will put in 150 million euros ($162.3 million) each during the current quarter.

The move could buy Sony Ericsson some much-needed time as it regroups and tries to compete with Finland's Nokia Corp., the world's largest mobile phone company, and encroachment by Schaumburg, Ill.-based Motorola Corp.

Analysts said the injection, along with the joint venture's new portfolio of phones, bodes well for Sony Ericsson. They said it was sign of confidence in the venture.

Ericsson has received plaudits for the release of its first color-screen phone, the T68, which was launched in 2002, but it has been hampered by delays in new models and competition from Nokia.

In the United States, Sony Ericsson has lost market share to Motorola and Samsung. But its new portfolio of phones, including the high-end P800, which features a built-in camera and personal digital assistant attributes, is helping the venture recover. Also helping are its low-end models, like the T300.

Sony Ericsson said it sold 7.1 million handsets during the fourth quarter, giving it a market share of about 6%, up from 4.9% during the third quarter.

For the fourth quarter, the two companies said the joint venture lost 69 million euros ($74.6 million) on sales of 1.2 billion euros ($1.3 billion), giving it a cumulative loss of about 3.8 billion kronor ($444.7 million) since the joint venture began.

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